People have different preferences when it comes to investment options. Some prefer schemes that offer guaranteed returns, while others are willing to take market risks for higher returns. Let’s see how much return one can get after 15 years by investing ₹10,000 per month in PPF or SIP.
Difference between PPF and SIP
- PPF is a government scheme that offers guaranteed returns, while SIP is a mutual fund investment option, and its returns depend on market fluctuations.
- The maturity period for PPF is 15 years, and it provides returns based on the interest rate fixed by the government. Currently, the rate is 7.1% per annum.
- For SIP, returns in the last few years have been significant, but there is no guarantee. The returns can vary depending on market fluctuations.
- SIP can be started or stopped at any time. However, experts suggest that investing through SIP can be beneficial in the long run.
Which Investment Option Gives More Returns After 15 Years?
PPF Calculation:
If you invest ₹10,000 every month in PPF, after one year, the total investment will be ₹1,20,000. Over 15 years, the total investment will amount to ₹18,00,000.
Returns: At an interest rate of 7.1% per annum, the interest after 15 years will be ₹14,54,567. So the total amount at maturity will be ₹32,54,567.
SIP Calculation:
SIP is subject to market risks, but experts say it can provide an average return of 12% per annum. Let’s assume you invest ₹10,000 every month in SIP. After one year, the total investment will be ₹1,20,000, and over 15 years, it will amount to ₹18,00,000.
Returns: At an average return of 12% per annum, you will earn ₹32,45,760 in interest. With the total investment, the total amount at maturity will be ₹50,45,760.
Which One Is Better?
If you invest in both PPF and SIP for the same period, SIP will likely give more returns. However, the choice between the two depends on your financial situation and risk tolerance. It is advisable to consult a financial advisor before making a decision.