If you’re planning to invest ₹90,000 every year and are confused between SIP and PPF, you’re not alone.
Both are popular, both are long-term friendly but the final return difference can be huge.
Let’s break this down simply so you can decide what fits your goals.
What Is SIP and PPF?
A SIP (Systematic Investment Plan) is a way to invest in mutual funds mostly equity every month. Returns are market-linked, so they can go up or down, but historically, long-term equity averages around 10–12% per year.
A PPF (Public Provident Fund) is a government-backed savings scheme with guaranteed, tax-free returns.
As of today, the PPF interest rate is 7.1% per year, and the lock-in is 15 years.
Comparing SIP vs PPF matters because:
- One offers higher potential growth,
- while the other offers guaranteed safety.
How SIP and PPF Work?
SIP
You invest a fixed amount every month. Here, ₹90,000 a year means ₹7,500/month.
If markets perform well, your money compounds faster. If they perform poorly, returns drop. Over 15 years, equity usually rewards patience.
PPF
You can invest a lump sum or in installments but maximum is ₹1.5 lakh per year.
At 7.1% interest, the returns are steady and predictable.
You cannot withdraw fully until 15 years (partial withdrawals start after year 5).
SIP vs PPF Returns: What Happens to ₹90,000/Year in 15 Years?
Let’s use simple, real-world assumptions based on today’s data:
- PPF interest rate: 7.1% (fixed for calculation)
- SIP expected return: 12% (common long-term estimate)
Here’s what ₹90,000/year becomes:
Estimated Corpus After 15 Years
| Investment | Yearly Amount | Return Rate | 15-Year Corpus (Approx) |
|---|---|---|---|
| PPF | ₹90,000 | 7.1% | ₹24–25 lakh |
| SIP | ₹90,000 | 12% | ₹35–40 lakh |
Why is SIP so much higher?
Because equity compounds faster over long durations.
The longer the timeframe, the more visible the gap becomes.
But remember:
- PPF returns are guaranteed.
- SIP returns are not guaranteed but historically stronger.
When Should You Prefer SIP Over PPF?
Choose SIP if:
- You want higher long-term growth
- You can handle market ups and downs
- Your goal is wealth creation, not capital protection
- Your horizon is 10+ years
Over 15 years, equity volatility smooths out for disciplined investors.
When Is PPF the Better Option?
Choose PPF if:
- You want guaranteed returns
- You prefer no-risk investments
- You want fully tax-free maturity
- You want to diversify away from equity
- You need a 15-year safe foundation
PPF is excellent for those who value stability over growth.
Common Mistakes in SIP vs PPF and How to Avoid Them
Mistake 1: Expecting SIP to give fixed returns
Equity returns fluctuate. Don’t assume 12% every year it’s an average, not a promise.
Mistake 2: Putting all money only in PPF
Low risk is great, but too much safety reduces long-term wealth.
Mistake 3: Choosing based on what others are doing
Your risk tolerance, age, and goals matter more than trends.
Mistake 4: Not staying invested through market dips
Many SIP investors stop right when markets are low missing future gains.
Best Strategy: SIP + PPF Together
For most investors, the smartest choice isn’t SIP or PPF it’s SIP and PPF.
- PPF provides stability + tax-free growth
- SIP provides high long-term growth potential
Together, they balance your portfolio beautifully.
A common formula is:
60% SIP + 40% PPF,
but you can adjust based on your risk profile.
Conclusion
If you invest ₹90,000/year for 15 years:
- PPF grows to around ₹24–25 lakh
- SIP can grow to ₹35–40 lakh
So yes SIP can give higher returns, but with higher risk.
PPF gives lower returns, but total safety and tax-free income.
Your best choice depends on whether you prefer:
- Safety (PPF)
- Growth (SIP)
- or a balanced mix (both)
FAQs
1. What is the current PPF interest rate?
The PPF rate is 7.1% per year as of the latest update.
2. How much will my SIP grow in 15 years?
With ₹90,000/year and an estimated 12% return, you may accumulate ₹35–40 lakh, but returns are not guaranteed.
3. Why does SIP give higher returns than PPF?
SIPs invest in equity, which grows faster than fixed-rate schemes over long periods due to compounding.
4. Can I withdraw PPF money before 15 years?
Only partial withdrawals are allowed after 5 years. Full withdrawal is allowed after 15 years.
5. How much should I invest in both?
A balanced approach is common many investors use SIP for growth and PPF for stability, adjusting based on risk tolerance.