PPF Calculator: Regarding long-term investments in India, people expect substantial returns from their hard-earned money. SIP (Systematic Investment Plan) and Public Provident Fund (PPF) are considered excellent options for long-term investment. These options cater to different financial goals and involve varying levels of risk. However, one cannot expect equally high returns from both investment options. Let’s explore which option—SIP or PPF—can provide better returns.
Know the Benefits of SIP in 10 Points
- Through SIP, investors can regularly invest in mutual funds, enabling consistent saving with the potential for significant returns.
- SIP’s performance is linked to the equity market, which offers the possibility of high returns.
- Long-term SIP investments in mutual funds can generate annual returns of up to 12%, aided by compounding.
- SIPs carry market risk, which may lead to fluctuations in the value of the investment.
- SIPs offer flexibility; investors can select the investment amount and duration based on convenience.
- Contributions can be stopped or redeemed easily, typically within 1-2 working days.
- SIPs are ideal for long-term goals such as higher education, marriage, or wealth accumulation.
- The power of compounding significantly boosts the growth of investments over time.
- SIP returns depend on the type of mutual fund chosen and the holding period.
- Equity-Linked Savings Schemes (ELSS), invested through SIP, provide tax benefits under Section 80C of the Income Tax Act.
Know the Benefits of PPF in 10 Points
- PPF is a government-backed savings scheme ensuring guaranteed returns.
- It is tailored for long-term savings with minimal risk exposure.
- PPF is highly suitable for risk-averse investors.
- Investments in PPF earn an annual return of around 7.1%, though rates are subject to government revisions.
- Long-term goals, such as retirement or a child’s education, can be achieved by investing in PPF over 15 years.
- Its 15-year lock-in period fosters disciplined and committed saving.
- Partial withdrawals from PPF are allowed only after the 7th year.
- While partial withdrawals reduce liquidity, they ensure financial safety for future needs.
- Investments under PPF are eligible for tax deductions under Section 80C, and both the principal and interest earned are tax-free.
- PPF is an excellent option for individuals seeking stable returns and disciplined savings habits.
Who Should Choose SIP?
SIPs are ideal for individuals with a stable income who are willing to take on market risks. They are particularly beneficial for achieving medium to long-term financial goals such as education, marriage, or wealth creation over time.
Who Should Choose PPF?
PPF is suitable for individuals who prioritize financial safety and guaranteed returns. It is especially effective for retirement planning and long-term financial security, offering tax-free returns while promoting disciplined savings.
Know the Benefits of SIP in 10 Points
- Through SIP, investors can regularly invest in mutual funds, enabling consistent saving with the potential for significant returns.
- SIP’s performance is linked to the equity market, which offers the possibility of high returns.
- Long-term SIP investments in mutual funds can generate annual returns of up to 12%, aided by compounding.
- SIPs carry market risk, which may lead to fluctuations in the value of the investment.
- SIPs offer flexibility; investors can select the investment amount and duration based on their convenience.
- Contributions can be stopped or redeemed easily, typically within 1-2 working days.
- SIPs are ideal for long-term goals such as higher education, marriage, or wealth accumulation.
- The power of compounding significantly boosts the growth of investments over time.
- SIP returns depend on the type of mutual fund chosen and the holding period.
- Equity-Linked Savings Schemes (ELSS), invested through SIP, provide tax benefits under Section 80C of the Income Tax Act.
Know the Benefits of PPF in 10 Points
- PPF is a government-backed savings scheme ensuring guaranteed returns.
- It is tailored for long-term savings with minimal risk exposure.
- PPF is highly suitable for risk-averse investors.
- Investments in PPF earn an annual return of around 7.1%, though rates are subject to government revisions.
- Long-term goals, such as retirement or a child’s education, can be achieved by investing in PPF over 15 years.
- Its 15-year lock-in period fosters disciplined and committed saving.
- Partial withdrawals from PPF are allowed only after the 7th year.
- While partial withdrawals reduce liquidity, they ensure financial safety for future needs.
- Investments under PPF are eligible for tax deductions under Section 80C, and both the principal and interest earned are tax-free.
- PPF is an excellent option for individuals seeking stable returns and disciplined savings habits.
Who Should Choose SIP?
SIPs are ideal for individuals with a stable income who are willing to take on market risks. They are particularly beneficial for achieving medium to long-term financial goals such as education, marriage, or wealth creation over time.
Who Should Choose PPF?
PPF is suitable for individuals who prioritize financial safety and guaranteed returns. It is especially effective for retirement planning and long-term financial security, offering tax-free returns while promoting disciplined savings (PPF vs SIP).
This Is How You Can Earn ₹25.22 Lakh from SIP
If you invest ₹5,000 monthly in SIP for 15 years with an expected annual return of 12%, your total corpus will exceed ₹25 lakh. Here’s the breakdown:
- Total investment amount: ₹9 lakh (₹5,000 x 180 months)
- Total returns: ₹16.22 lakh (based on 12% annual interest compounded).
By adding your investment and returns, your total savings will amount to ₹25.22 lakh after 15 years.
Return of Up to ₹16.27 Lakh from PPF
If you invest ₹60,000 annually in PPF for 15 years, with an average annual return of 7.1%, your total corpus will be:
- Total investment amount: ₹9 lakh (₹60,000 x 15 years)
- Total returns: ₹7.27 lakh (based on 7.1% annual interest).
Adding your investment and returns, the total amount in your PPF account will be ₹16.27 lakh after 15 years.
Disclaimer: Times Bull will not be responsible for any financial investments made, as it is entirely your responsibility. Please consult a financial advisor for better results.
