SIP vs PPF with Rs 1,45,000/year investment: Which can create a larger corpus in 35 years? These projections may blow your mind
Let’s just compare SIP vs PPF to help you decide where you can invest to generate a higher corpus between the given options with a Rs 1,45,000/year investment in 35 years. Take a look.
When it comes to saving and investing, two popular options in India are SIP (Systematic Investment Plan) and PPF (Public Provident Fund). SIP invests in the stock market for potentially higher returns, while PPF offers secure, guaranteed returns. Let's compare SIP and PPF with a Rs 1,45,000/year investment for 35 years to find out which can generate a higher corpus.
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Also Read: Rs 3,000 SIP Vs Rs 3,00,000 Lump Sum: Which can generate a higher corpus in 30 years?
What is Systematic Investment Plan (SIP)?
A Systematic Investment Plan (SIP) allows you to invest in mutual funds by contributing a fixed amount at regular intervals.
What is PPF?
The Public Provident Fund (PPF) is a government-backed savings scheme designed for long-term financial goals. With a tenure of 15 years, extendable in blocks of five years, PPF ensures safety and offers attractive interest rates.
PPF calculation conditions: Rs 1,45,000/year investment for 35 years
Yearly investment: Rs 1,45,000 (monthly investment Rs 12,083x 12 months)
Time period: 35 years
Rate of interest: 7.1 per cent
PPF: What will be your retirement corpus in 35 years with Rs 1,45,000/year investment?
On a Rs 1,45,000/year investment, the retirement corpus in 35 years will be Rs 2,19,41,262. The estimated total interest during that time will be Rs 1,68,66,262.
SIP Calculation Conditions
Since there are no fixed returns in SIP investment, we are calculating as per annualised returns of 8 per cent (debt fund), 10 per cent (equity fund), and 12 per cent (hybrid fund).
SIP: What you can get on Rs 12,083 monthly investment for 35 years (hybrid fund)
At 12 per cent annualised growth, the estimated corpus in 35 years will be Rs 6,65,87,372. During that time, the invested amount will be Rs 50,74,860, and estimated capital gains will be Rs 6,15,12,512
SIP: What you can get on Rs 12,083 monthly investment for 35 years (equity fund)
At 10 per cent annualised growth, the estimated corpus in 35 years will be Rs 4,13,95,071. The estimated capital gains will be Rs 3,63,20,211
SIP: What you can get on Rs 12,083 monthly investment for 35 years (debt fund)
At 8 per cent annualised growth, the estimated corpus in 35 years will be Rs 2,60,55,212. The estimated capital gains will be Rs 2,09,80,352.