PPF vs SIP Investment: Investment is important for everyone. Some people want to keep their savings safe while others choose to take risk to earn more. Two options are often discussed for long term investment. PPF and Mutual Fund SIP, but when the question arises that by investing Rs 10,000 every month, which will give the highest return, then it is important to know the answer. Let us understand both options in simple words…
Public Provident Fund (PPF)
PPF is one of the most trusted and safe investment schemes in the country. You can invest up to ₹ 1.5 lakh annually in this. Its lock-in period is 15 years. Currently 7.1% interest is being given on PPF.
If you invest Rs 10,000 every month or Rs 1,20,000 every year in PPF and continue it for 15 years, then you will have to invest Rs 18 lakh.
You will get Rs 32 lakh 54 thousand after 15 years. There will be a profit of Rs 14 lakh 54 thousand in this. This means it is safe and stable but returns are limited.
mutual fund sip
SIP is considered a strong option for long term investment (Mutual Fund SIP). You can invest as much as you want every month. You get the benefit of compounding in the long run. An average annual return of 12 percent is expected.
Story of SIP of Rs 10 thousand every month
If we talk about investing Rs 10 thousand every month in SIP, then the total investment in 15 years will be Rs 18 lakh. If we look at the fund value at 12 percent return, you will get Rs 47 lakh 59 thousand. That means the benefit will be Rs 29 lakh 59 thousand which is almost double as compared to PPF.
Now know which one has more benefits?
If you want a risk free option then PPF is better. But if your aim is to build a larger corpus and you can handle market fluctuations then SIP returns are more attractive. Both options are good. Your goals and risk appetite will decide which one is best for you.
