SIP vs PPF: Where will you get higher returns by investing ₹7,500 per month for 15 years? Here's the complete calculation..

SIP vs PPF: In today's world, earning money is difficult, but saving that money and investing it wisely is even more challenging. In this era of inflation, people's budgets often go haywire towards the end of the month. However, for financial security, what matters more than your salary is how much you save and how you put those savings to work.

Choosing the right investment option for future needs has always been a major dilemma. While people generally consider the Public Provident Fund (PPF) to be the safest option, the Systematic Investment Plan (SIP) has now carved out a distinct identity for itself in terms of wealth creation. Today, we will show you, through figures, which scheme will give you more profit over the next 15 years if you save Rs. 7,500 per month.

If your annual savings are Rs. 90,000, which is Rs. 7,500 per month, there are two ways to invest it: either you invest a lump sum in PPF or invest Rs. 7,500 every month through an SIP. Both are excellent options for regular investment, but there is a huge difference in their returns over 15 years. Over this entire period, the total principal amount invested from your pocket will be Rs. 13.5 lakh.

How much return will you get in PPF?
First, let's talk about the Public Provident Fund (PPF). This scheme is considered excellent for those who do not want to take any kind of risk with their money. If you continuously deposit Rs. 90,000 every year in this account for 15 years, calculated at the current interest rate of 7.1 percent.

With this investment, you get government security, but due to the fixed interest rate, the rate of money growth remains somewhat slow. According to the calculation, after 15 years, your total deposit (Rs. 13.5 lakh) will accumulate interest, and you will get a fund of approximately Rs. 24.4 lakh.

The amount will triple in SIP
Now let's talk about Mutual Fund SIPs. The risk is slightly higher here, but the potential returns are equally strong. If you invest the same ₹90,000 annually (i.e., ₹7,500 per month) through a Systematic Investment Plan (SIP), the math changes completely.

Considering the historical performance of the stock market, an average annual return of 12% over the long term is a reasonable assumption. Based on this, the power of compounding comes into play when you invest ₹7,500 every month for 15 years. After 15 years, your total fund could reach approximately ₹37.8 lakh.

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