Systematic Investment Plans (SIP) and Public Provident Funds (PPF) are extremely beneficial for those who seek investment options for the long –term. The characteristics of both are different, but you can invest a good amount by investing for a long period. But, which option is right for your financial goals? Let us explain as an example, if you invest an annual investment of Rs 1,35,000, then how much return you will get? Do you also want to know which option is better for you? So let’s know.
What is a SIP
SIP is an alternative to investing in mutual funds which is connected to the stock market. In this, any person can invest less than Rs 500. You can get up to 12 percent returns in SIP. You can invest in it according to your ability and monthly earnings.
What is PPF
PPF or Public Provident Fund This is a government scheme that gives you tax benefits. In this, you can invest up to Rs 1.5 lakh in a year. The interest rate given by PPF is 7.1 percent. The maturity period in this is 15 years.
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Comparison of 1.35 lakh annual investment
If you invest Rs 1,35,000 annually in both SIP and PPF for 15 years, can you guess how much money you can deposit? Let us talk about it.
SIP investment calculation
If you invest Rs 11,250 per month in SIP, then your total investment will be Rs 20,25,000 in 15 years. It gets an average annual return of 12 percent, while at the end of 15 years, the total deposit will be around Rs 56,76,480, including Rs 36,51,480 your capital advantage.
PPF investment calculation
If you invest Rs 1,35,000 per year in PPF, then your total investment in 15 years will also be Rs 20,25,000. However, with an annual return of 7.1 percent, the interest will be Rs 20,25,000. In addition, the final fund in it will be around Rs 36,61,388.
Both SIP and PPF are good options for long-term investment. SIP is prone to more returns, but it also has high risk. PPF is a low-risk and tax-benefit option. You can choose the correct option according to your risk ability and financial goals.
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