SIP vs PPF: Which Investment Creates a Higher Corpus in 15 Years?
When it comes to investing for the long haul, two popular options often come up: Systematic Investment Plans (SIPs) in mutual funds and Public Provident Fund (PPF). With an annual investment of Rs 1,25,000, let’s delve into which option could be more lucrative over a period of 15 years.
Understanding SIP and PPF
SIP is a method of investing in mutual funds where you contribute a fixed amount regularly, allowing your investment to grow over time through the power of compounding. On the other hand, PPF is a government-backed savings scheme that offers a fixed interest rate, compounded annually, with a lock-in period of 15 years.
Projected Returns from SIP
Assuming an average annual return of 12% from a SIP, an investment of Rs 1,25,000 per year could yield approximately Rs 1.45 crore in 15 years. This estimate considers the potential for market fluctuations but highlights the benefits of equity exposure.
Projected Returns from PPF
With the current PPF interest rate at around 7.1%, your annual investment of Rs 1,25,000 could grow to about Rs 40.26 lakh over the same 15-year period. While PPF is low-risk, the returns are comparatively lower than those from a SIP.
Conclusion: Which is Better?
For investors willing to take on some risk, SIPs can potentially create a significantly higher corpus over 15 years compared to PPF. However, if you prefer a government-backed, risk-free option, PPF remains a solid choice.
Ready to start your investment journey? Check out Looffers.com for exclusive deals on financial products that can help you get started today!
