SIP vs PPF: Sip and ppf The two options pper-terp investment options can help gather money for financial requirements such as retirement, some other than many ways. What is it? And what investment option can make a larger corpus in 15 years with an investment in Rs 55,000 per year? Let’s compare it to finding –
What is SIP?
The systematic investment plan (SIP) is an optional market-long-term investment that allows investors to invest in a fixed amount of mutual funds. A person can start investing in SIP with low Rs 500 per month, while no maximum limit. It’s not a lock-in time, and the investor gets. Because sips are the investors related to the market, returns are not fixed and can change. However, we believe a 12 percent annual return rate for calculations.
What is PPF?
The Public Proventient Fund (PPF) is a deceived government-backed way that allows investors to invest in cash every year and get strong returns. The minimum amount to invest is Rs 500 per financial year. The maximum amount to be reduced each year is Rs 1.5 lakh. The maturity and locking-for 15 years. Also, the intended intended by government-backed offers an interest rate of 7.1 percent each year.
Now, consider you invest in Rs 55,000 per year with a SIP mutual fund at 12 percent annual return rate. This means you invested Rs 6,250 per month. At the same time, consider you invest in the same amount each year in the PPF in a 7.1 percent recovery of interest.
Can you guess which investment option does a larger corpus in 15 years? We can calculate and find.
SIP Investment calculation for Rs 55,000 annual investment
As per calculations, your total investment is about Rs 8,24,940 for 15 years. Capital acquisitions obtained in these years will be Rs 13,56,254. And the total corpus produced by the end of 15 years can be approximately Rs 21,81,194.
SIP return (with 12% annual interest in interest):
- Monthly Investment: Rs 4,583
- Total investments (15 years): Rs 8,24,940
- Estimated return: Rs 13,56,254
- Total value: Rs 21,81,194
PPF investment calculation for an Rs 55,000 annual investment
As per calculations, your overall investment is about Rs 8,25,000 for 15 years. The interest obtained would be Rs 6,66,677. With this, the final corpus is around Rs 14,91,677.
PPF return (with 7.1% annual interest in interest):
- Annual Investment: Rs 55,000
- Total investment (15 years): Rs 8,25,000
- The interest earned: Rs 6,66,677
- Total Corpus: Rs 14,91,677
(DISCLAIM: Our calculations are projections and not investment advice. Do your deserving hard work or consult an expert for financial planning.)
