SIP vs PPF: Public Provident Fund (PPF) and Systematic Investment Plan (SIP) are two investment options for investors looking for disciplined and consistent ways to invest. While both work well for long-term investment plans, one is a government-backed savings scheme, while the other is a market-linked investment plan. But which one suits you best based on your financial needs? In this write-up, we will explain through calculations, which one provides a higher return on Rs 1,50,000 annual investment.
What is an SIP?
– It is a market-linked investment that allows investors to invest money based on their financial capacity.
– The investors have the flexibility to invest – monthly, quarterly, or annually.
– The average long-term return in SIP is 12 per cent.
What is a PPF?
– It is a government-backed savings scheme in which investors can invest up to Rs 1.5 lakh per year.
– The maturity period in PPF is 15 years.
– The annual interest rate is 7.1 per cent.
SIP vs PPF: How Much Corpus You Will Generate in 15 Years?
Can you guess how much corpus one can generate in 15 years if the annual investment is Rs 1,50,000? Let’s find out.
SIP Investment Calculation: How Much Corpus Will You Generate in 15 Years with Rs 1,50,000 Annually?
If you invest Rs 1,50,000 yearly in SIP (Rs 12,500 per month), your total investment will amount to Rs 22,50,000 in 15 years. Assuming an average annual return of 12 per cent, the total corpus generated at the end of 15 years would be approximately Rs 59,49,142, including Rs 36,99,142 as capital gains.
PPF Investment Calculation: How Much Will Your Corpus Grow in 15 Years with Rs 1,50,000 Annually?
If you invest Rs 1,50,000 per year in a PPF, your total investment over 15 years will also amount to Rs 22,50,000. However, with an annualised return of 7.1 per cent, the interest earned would be Rs 18,18,209. With this, the final corpus will be around Rs 40,68,209 (principal + interest).
Investment Summary (Figures in Rupees)
| Investment Type |
Total Investment (15 years) |
Capital Gain |
Final Corpus |
| SIP |
22,50,000 |
36,99,142 |
59,49,142 |
| PPF |
22,50,000 |
18,18,209 |
40,68,209 |
SIP Investment Summary –
| Year |
SIP Amt /
Month |
Total Invested
Amt |
Interest Amt /
Year |
Maturity
Value |
| Year1 |
12,500 |
1,50,000 |
10,117 |
1,60,117 |
| Year2 |
12,500 |
3,00,000 |
40,540 |
3,40,540 |
| Year3 |
12,500 |
4,50,000 |
93,846 |
5,43,846 |
| Year4 |
12,500 |
6,00,000 |
1,72,935 |
7,72,935 |
| Year5 |
12,500 |
7,50,000 |
2,81,080 |
10,31,080 |
| Year6 |
12,500 |
9,00,000 |
4,21,963 |
13,21,963 |
| Year7 |
12,500 |
10,50,000 |
5,99,737 |
16,49,737 |
| Year8 |
12,500 |
12,00,000 |
8,19,082 |
20,19,082 |
| Year9 |
12,500 |
13,50,000 |
10,85,269 |
24,35,269 |
| Year10 |
12,500 |
15,00,000 |
14,04,238 |
29,04,238 |
| Year11 |
12,500 |
16,50,000 |
17,82,685 |
34,32,685 |
| Year12 |
12,500 |
18,00,000 |
22,28,152 |
40,28,152 |
| Year13 |
12,500 |
19,50,000 |
27,49,139 |
46,99,139 |
| Year14 |
12,500 |
21,00,000 |
33,55,224 |
54,55,224 |
| Year15 |
12,500 |
22,50,000 |
40,57,200 |
63,07,200 |
PPF Investment Summary –
| Year of deposit |
Amount deposited |
Interest earned |
Year end Balance |
| 1 yr |
Rs 1,50,000 |
Rs 10,650 |
Rs 1,60,650 |
| 2 yr |
Rs 3,00,000 |
Rs 32,707 |
Rs 3,32,707 |
| 3 yr |
Rs 4,50,000 |
Rs 66,979 |
Rs 5,16,979 |
| 4 yr |
Rs 6,00,000 |
Rs 1,14,334 |
Rs 7,14,334 |
| 5 yr |
Rs 7,50,000 |
Rs 1,75,702 |
Rs 9,25,702 |
| 6 yr |
Rs 9,00,000 |
Rs 2,52,077 |
Rs 11,52,077 |
| 7 yr |
Rs 10,50,000 |
Rs 3,44,524 |
Rs 13,94,524 |
| 8 yr |
Rs 12,00,000 |
Rs 4,54,185 |
Rs 16,54,185 |
| 9 yr |
Rs 13,50,000 |
Rs 5,82,282 |
Rs 19,32,282 |
| 10 yr |
Rs 15,00,000 |
Rs 7,30,124 |
Rs 22,30,124 |
| 11 yr |
Rs 16,50,000 |
Rs 8,99,113 |
Rs 25,49,113 |
| 12 yr |
Rs 18,00,000 |
Rs 10,90,750 |
Rs 28,90,750 |
| 13 yr |
Rs 19,50,000 |
Rs 13,06,644 |
Rs 32,56,644 |
| 14 yr |
Rs 21,00,000 |
Rs 15,48,515 |
Rs 36,48,515 |
| 15 yr |
Rs 22,50,000 |
Rs 18,18,210 |
Rs 40,68,210 |
