Know Which Option Builds A Larger Corpus With Rs 90,000 Annual Investment Over 15 Years News24 –

Long-term savings results benefit greatly from selecting the right investment strategy. Indian investors seeking investment strategies commonly choose between the systematic investment plan (SIP) and the public provident fund (PPF) due to their appealing benefits.

Among these two options which will give you the larger investment amount when you invest Rs 90,000 per year for 15 years?

SIP Provides Market-Oriented Returns That Show Growth Potential

Devoting a set amount to mutual funds through a Systematic Investment Plan (SIP) lets investors make periodic payments. The method involves distributing payment through periodic scheduled contributions instead of delivering one large lump sum. Monthly contributions work most commonly in such systems. Consistent investment amounts through this method reduces the impact of market price changes.

Your bank account automatically transfers Rs 7500 each month to mutual funds for investment purposes until you reach Rs 90000 yearly.

Mutual funds issue units to investors based on the Net Asset Value (NAV) rate active during the purchase time. Your investment grows by both compound interest and market value expansions during the period. Through SIP you obtain the option to control your contribution levels by increasing them or decreasing them or stopping them altogether based on your financial status. This financial strategy proves beneficial to investors who have moderate through high risk thresholds and set extended investment periods.

For a Rs 7,500 monthly investment over 15 years:
Total investment: Rs 13,50,000
Estimated returns: Rs 22,19,485
The estimated final value reaches Rs 35,69,485 under the assumption of a 12% average yearly return.

Guaranteed Returns With Tax Benefits

The Public Provident Fund (PPF) operates as an Indian government-supported investment plan intended for sustaining wealth growth through extended periods. The investment delivers guaranteed returns while also providing tax benefits as one of its features.

Key Features Of PPF:

The current annual interest rate under this program stands at 7.1% while implementing yearly compound calculation.
A minimum contribution of Rs 500 exists while the maximum annual investment reaches Rs 1.5 lakh.
Investors can maintain their funds for at least 15 years at first although they may continue their deposits through successive five-year periods.
Section 80C allows tax deductions for PPF investments and the received interest together with the maturity sum are both tax-free.
Person looking for guaranteed investment returns should opt for PPF as it provides a reliable and dependable option.

For A Rs 90,000 Annual Investment Over 15 years:

Total investment: Rs 13,50,000
Estimated returns: Rs 10,90,926
Final corpus: Rs 24,40,926

SIP Vs PPF

SIP enables individuals to build a significant investment portfolio worth more than PPF when they seek market-conditioned growth during a fifteen-year period. The advantages of PPF include its safe option for providing a stable investment path together with tax-friendly benefits and guaranteed returns.

The investment value from SIP can become approximately Rs 11 lakh greater than PPF with equivalent annual contributions during the same time period. Your investment destiny relies on your financial settings along with your willingness to take investment risks.

(Disclaimer: This article is for informational purposes only and not an investment advice. Prior to making an investment or taking a loan, conduct thorough research and consult with your financial advisor.)