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SIP is a process of investing a fixed amount regularly in mutual funds. Individuals can invest daily, monthly, quarterly, or yearly in a mutual fund scheme. Some mutual funds allow investors to invest with as little as Rs 100. Whereas, Public Provident Fund is a government-backed retirement scheme that is eligible for tax deductions under Section 80C of the Income Tax Act. PPF offers guaranteed returns as they are backed by the government. If you were wondering where to invest between these two investment options. Let’s find out by comparing the investment amount of Rs 1,50,000/year for 26 years period. 

The minimum amount to invest in every mutual fund varies. Thus, there is no definite minimum investment amount, but some funds offer a minimum investment amount as small as Rs 100.

The minimum deposit in a year is Rs 500, whereas the maximum limit in a year is Rs 1.5 lakh.

Currently Public Provident Fund is offering an interest rate of 7.1 per cent.

Since there are no fixed returns in SIP investment, we are calculating as per annualised returns of 8 per cent (debt fund), 10 per cent (equity fund), and 12 per cent (hybrid fund).

Yearly investment: Rs 1,50,000 (monthly investment Rs 12,500x 12 months)

Time period: 26 years

Rate of interest: 7.1 per cent 

On a Rs 1,50,000/year investment, the retirement corpus in 26 years will be Rs 1,12,00,534. The estimated total interest during that time will be Rs 73,00,534. The investment amount will be Rs 39,00,000. 

Since there are no fixed returns in SIP investment, we are calculating as per annualised returns of 8 per cent (debt fund), 10 per cent (equity fund), and 12 per cent (hybrid fund). We're also assuming a monthly investment of Rs 12,500 (1,50,000/12)

At 12 per cent annualised growth, the estimated corpus in 26 years will be Rs 2,39,90,473. During that time, the invested amount will be Rs 39,00,000, and estimated capital gains will be Rs 2,00,90,473.

At 10 per cent annualised growth, the estimated corpus in 26 years will be Rs 1,72,51,451. The estimated capital gains will be Rs 1,33,51,451.

At 8 per cent annualised growth, the estimated corpus in 26 years will be Rs 1,25,06,756. The estimated capital gains will be Rs 86,06,756. 

Also Read: Rs 6,000 SIP Vs Rs 6,00,000 Lump Sum: Which can generate a higher corpus in 30 years?

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