🔹 Assumptions for Comparison
- Investment amount: ₹95,000 per year (≈ ₹7,916/month SIP)
- Time horizon: 15 years (since PPF has a 15-year lock-in)
- PPF interest rate (2025): ~7.1% (compounded annually, govt-backed, fixed-ish)
- Equity Mutual Fund SIP average return: 10–12% (long-term historical average; actual can vary 8–15%)
🔸 Case 1: PPF
- Annual contribution: ₹95,000
- Tenure: 15 years
- Interest: 7.1% p.a.
👉 Final corpus ≈ ₹26.5 – 27 lakhs
🔸 Case 2: Mutual Fund SIP
- Monthly SIP: ~₹7,916
- Tenure: 15 years
- Return assumed: 12% CAGR
👉 Final corpus ≈ ₹41 – 42 lakhs
(If returns are only 10%, corpus will be ~₹37 lakhs)
📊 Comparison Table (15 Years)
| Investment Option | Annual Investment | Return Assumption | Final Corpus |
|---|---|---|---|
| PPF | ₹95,000 | 7.1% | ~₹27 lakhs |
| SIP (Equity MF) | ₹95,000 | 10–12% | ~₹37–42 lakhs |
✅ Key Takeaways
- SIP can build a bigger corpus (₹10–15 lakh higher than PPF in 15 years) because equities beat inflation better.
- PPF is 100% safe & tax-free → guaranteed, risk-free, but limited growth.
- SIP has market risk, but over 15 years, volatility usually smoothens, and equity tends to outperform fixed-income.
- Many investors actually do both → PPF for safety + SIP for growth.
