SIP vs PPF: Which Investment Builds a Bigger Corpus with ₹95,000 Per Year?

When it comes to building long-term wealth , Indian investors often find themselves torn between two popular options-Public Provident Fund (PPF) and Systematic Investment Plans (SIPs) in mutual funds. Both are proven ways to grow money, yet they follow very different paths. A closer look shows how ₹95,000 invested each year for 15 years can deliver very different outcomes.

PPF: The Safe and Tax-Free Choice

PPF is one of the most trusted savings schemes in India, backed by the Government. It currently offers 7.1% annual interest, compounded yearly. The scheme comes with a 15-year lock-in, making it ideal for disciplined, risk-averse investors.

The biggest advantage of PPF is its tax-free status. Contributions, interest earned, and final maturity proceeds all fall under the Exempt-Exempt-Exempt (EEE) category, which means your entire investment and gains remain untouched by tax.

For someone investing ₹95,000 annually, the PPF account will grow to nearly ₹27.7 lakh in 15 years. While the growth is steady and guaranteed, the returns are relatively modest compared to market-linked investments.

SIP : Growth Through Equity Mutual Funds

On the other hand, investing the same ₹95,000 per year (around ₹7,900 monthly) in mutual fund SIPs can potentially generate much higher returns. Equity markets have historically rewarded long-term investors, and SIPs allow investors to benefit from compounding and rupee cost averaging.

Assuming different growth scenarios, here’s how much your SIP investment can be worth in 15 years:

• At 10% CAGR → ~₹38 lakh

• At 12% CAGR → ~₹43.5 lakh

• At 14% CAGR → ~₹50+ lakh

Even after accounting for 10% tax on long-term capital gains above ₹1 lakh per year, SIPs still deliver 1.5 to 2 times higher corpus than PPF. Moreover, SIPs offer flexibility-no fixed lock-in period (except minor exit loads), making them more liquid than PPF.

Year-Wise Comparison: PPF vs SIP

Here’s how the two investments stack up over time:

Year PPF Corpus (₹) SIP Corpus (₹ at 12% CAGR)

The difference becomes noticeable after the first few years and widens significantly by the end of 15 years.

The Balanced Approach

So, which is better-PPF or SIP? The answer depends on your financial goals and risk appetite.

• Choose PPF if you value safety, guaranteed returns, and complete tax exemption.

• Choose SIPs if you can handle market fluctuations for the possibility of much higher wealth creation.

Financial planners often recommend a balanced strategy-investing in both PPF and SIPs. This way, you enjoy the security of PPF while tapping into the growth potential of equity SIPs.

With ₹95,000 invested annually, PPF gives you a stable ₹27.7 lakh after 15 years, while SIPs can create anywhere between ₹38–50 lakh, depending on market performance. The smart move for most investors is to blend the two, ensuring both safety and long-term wealth creation.

Disclaimer: This article is intended for informational and educational purposes only. The opinions and recommendations expressed are those of individual analysts or brokerage firms and do not reflect the views of NewsPoint. Investors are advised to consult certified financial advisors before making any investment decisions.