A comparison of investing ₹5,000 per month in a mutual fund SIP versus the Public Provident Fund (PPF) over 15 years shows contrasting outcomes. While PPF offers guaranteed, tax-free returns of about ₹15.7 lakh, SIPs can potentially grow to nearly ₹23.8 lakh, albeit with market-linked risks.
When it comes to long-term wealth creation, Indian investors often weigh the safety of PPF against the growth potential of SIPs. Both options require disciplined monthly contributions, but their structures and outcomes differ significantly.
PPF, backed by the government, currently offers 7.1% annual interest, with a 15-year lock-in and tax-free maturity. A ₹5,000 monthly investment over 15 years totals ₹9 lakh, which grows to approximately ₹15.7 lakh at maturity.
On the other hand, a mutual fund SIP, assuming 10–12% annualized returns, could generate a corpus of ₹23–24 lakh over the same period. While SIPs carry market risks, they benefit from compounding and equity market growth, making them attractive for investors seeking higher returns.
Key Highlights / Major Takeaways:
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PPF Returns: Safe, tax-free, ~₹15.7 lakh over 15 years.
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SIP Returns: Market-linked, ~₹23–24 lakh potential corpus.
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Risk Profile: PPF = low risk, guaranteed; SIP = higher risk, higher reward.
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Liquidity: PPF has strict lock-in; SIPs offer more flexibility.
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Investor Choice: PPF suits conservative savers; SIPs suit growth-oriented investors.
Ultimately, the choice depends on risk appetite—security vs. growth—but combining both can balance stability and wealth creation.
Sources: NDTV Profit, Money9, News18 Hindi