PPF or SIP...how much fund will be generated in 15 years? See the calculation on investing ₹1,50,000 annually..

If you want to invest in a scheme that has the potential to create a huge fund in the long term, then Mutual Fund SIP and Public Provident Fund (PPF) are two options that can be useful for you. But one of these is a scheme based on market fluctuations, while the other is a secure investment option. PPF matures in 15 years, while you can stop SIP anytime. If you have to invest Rs 1.5 lakh annually for 15 years, which scheme will be better in terms of returns? Understand through calculations.

PPF is a secured investment and SIP is market-based
PPF is a government-guaranteed scheme, while SIP is a market-linked scheme. In such a situation, there is no guarantee of return in it. But its return is considered quite good in the long term. There is no limit on investment in mutual funds through SIP, but in PPF you can invest a maximum of ₹1.5 lahks per year, so here the calculation is being done on an annual investment of ₹1.5 lahks, so that the returns of both can be compared.

How much investment in 15 years if you invest ₹1.5 lakh annually

Be it PPF or SIP, if you invest ₹1.5 lakh annually, you will invest ₹12,500 every month. In this way, you will invest a total of ₹22,50,000 in 15 years. You get an interest of 7.1 percent on PPF, while the average return of SIP in the long term is considered to be 12 percent.

How much will be the maturity amount on PPF?
If you invest Rs 1.5 lakh annually in PPF for 15 years continuously, you will get a total of Rs 40,68,209 as maturity amount at the rate of 7.1 percent interest. In this, you will invest Rs 22,50,000 and you will earn Rs 18,18,209 from interest.

How much return on SIP
If you invest Rs 1.5 lakh annually in SIP for 15 years continuously, you will get Rs 59,49,142 as maturity amount after 15 years at the rate of 12 percent return. In this, you will invest Rs 22,50,000 and you will get Rs 36,99,142 as interest.

What if you want to invest in PPF for more than 15 years?

If you want to invest in PPF for more than 15 years, you can do that too. In this scheme, you get the option of extension. However, the extension is done in blocks of 5-5 years. For this, you have to give an application to the place where your post office account is open before the completion of 1 year from the date of maturity. After this, you have to fill out and submit a form for an extension.

Understand this thing about SIP.

SIP is a market-linked scheme, so returns cannot be guaranteed in it. 12 percent return in the long term is told based on an estimate. It can be less or more depending on the market situation. However, despite these risks, SIP is considered very good in terms of wealth creation because it provides the benefit of rupee cost averaging, so the loss is covered to a large extent. Still, if you are investing in it, then invest keeping in mind the risk of SIP.

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