SIP vs PPF: By investing Rs 50,000 per year in each property, how much wealth can you build in 15 years?

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SIP vs PPF: By investing Rs 50,000 per year in each property, how much wealth can you build in 15 years?

SIP vs PPF: Everyone needs to build wealth for their post-retirement life to ensure they can live stress-free and remain financially independent. If you are looking to accumulate more corpus and are exploring good investment options, you can consider Public Provident Funds (PPF) or Systematic Investment Plans (SIPs). If you are wondering what these are, they are both popular long-term investment strategies. PPF is a government-backed savings plan, and SIP is a market-linked investment plan.

SIP vs PPF: Key Differences

Here are the basic differences between these two investment options:

SIP: With SIP, you can invest monthly, quarterly, or annually based on your financial capacity. The average long-term return is 12 percent.
PPF: In PPF, you can invest up to Rs 1.5 lakh per year, and the maturity period is 15 years. It offers an average interest rate of 7.1 percent per annum.

Can you guess how much money you will have after 15 years on both investments if you invest Rs 50,000 per year? Let’s find out.

SIP Investment Calculation: How much money will you make in 15 years with an annual investment of Rs 50,000?

If you invest Rs 50,000 per year (Rs 4,167 per month), your total investment over 15 years will reach Rs 7,50,060. Assuming an annual rate of return of 12 percent, your corpus at the end of 15 years will be around Rs 21,02,568, including Rs 13,52,508 as capital gain.

PPF Investment Calculation: How much income will you generate in 15 years with an annual investment of Rs 50,000?

If you invest Rs 50,000 per year in PPF, your total investment in 15 years will also be Rs 7,50,000. However, with an annual return of 7.1 percent, the interest earned would be Rs 6,06,070. The final corpus will grow to around Rs 13,56,070 (amount of both principal and interest).

Investment Summary (Figures in Rupees)

Type of Investment	Total Investment (15 years)	Cash Profit	The Final Corpus
SIP	7,50,000	13,52,508	21,02,568
The PPF	7,50,000	6,06,070	13,56,070

SIP Investment Summary –

A year	SIP Amt / The month	Total Investment Amt	Interest Amt / A year	Maturity Price
Year 1	4,167	50,004	3,372	53,376
Year 2	4,167	1,00,008	13,514	1,13,522
Year 3	4,167	1,50,012	31,284	1,81,296
Year 4	4,167	2,00,016	57,650	2,57,666
Year 5	4,167	2,50,020	93,701	3,43,721
Year 6	4,167	3,00,024	1,40,666	4,40,690
Year 7	4,167	3,50,028	1,99,928	5,49,956
Year 8	4,167	4,00,032	2,73,049	6,73,081
Year 9	4,167	4,50,036	3,61,785	8,11,821
Year 10	4,167	5,00,040	4,68,117	9,68,157
Year 11	4,167	5,50,044	5,94,276	11,44,320
Year 12	4,167	6,00,048	7,42,777	13,42,825
Year 13	4,167	6,50,052	9,16,453	15,66,505
Year 14	4,167	7,00,056	11,18,498	18,18,554
Year 15	4,167	7,50,060	13,52,508	21,02,568

PPF Investment Summary –

Year of deposit	Installed value	Interest earned	Year-end balance
1 year	50,000	3,550	R53,550
2 years	₹1,00,000	R10,903	R1,10,903
3 years	₹1,50,000	R22,327	R1,72,327
4 years	₹2,00,000	R38,112	₹2,38,112
5 years	₹2,50,000	R58,568	R3,08,568
6 years	₹3,00,000	R84,026	R3,84,026
7 years	R3,50,000	R1,14,842	R4,64,842
8 years	₹4,00,000	R1,51,395	R5,51,395
9 years	R4,50,000	₹1,94,094	₹6,44,094
10 years	₹5,00,000	R2,43,375	R7,43,375
11 years	₹5,50,000	₹2,99,705	₹8,49,705
12 years	₹6,00,000	R3,63,584	9,63,584
13 years	₹6,50,000	R4,35,548	R10,85,548
14 years	₹7,00,000	₹5,16,172	₹12,16,172
15 years	₹7,50,000	₹6,06,070	₹13,56,070

Key Considerations:

– SIPs are linked to the market, which means returns are not guaranteed. The 12 percent return mentioned above is an estimate, and actual returns may vary depending on market conditions.

– PPF offers guaranteed benefits, but the interest rate is fixed and lower than that of SIPs.

(Disclaimer: Our calculations are guesswork and not investment advice. Do your best or consult a professional for financial planning)

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