PPF vs SIP Comparison How Much Will 12500 Monthly Give You at Retirement?

If you’re a salaried employee or from a middle-class family planning for retirement, you’ve likely heard of PPF and SIP. Both help you grow money steadily, but which one creates more wealth when you invest ₹12,500 every month? Let’s find out.
What’s PPF?
PPF (Public Provident Fund) is a safe, government-backed savings scheme with a 15-year lock-in (extendable in 5-year blocks). It offers a fixed 7.1% annual interest, and your investment, interest, and maturity amount are 100% tax-free under Section 80C.
What’s SIP?
A Systematic Investment Plan (SIP) lets you invest regularly in mutual funds, mostly equity-based. The average return for equity SIPs is 12% yearly, but returns depend on market performance and aren’t guaranteed.
How Much Will ₹12,500 Monthly Grow?
Time Period | PPF | SIP |
25 Years | ~₹1.04 crore | ~₹2.02 crore |
30 Years | ~₹1.71 crore | ~₹3.51 crore |
35 Years | ~₹2.75 crore | ~₹6.19 crore |
PPF has a yearly limit of ₹1.5 lakh, so ₹12,500/month is max. SIP has no upper limit.
PPF vs SIP – Which is Better?
1. Safety: PPF is 100% safe and risk-free. SIP carries short-term market risks but offers higher growth in the long run.
2. Returns: PPF’s returns are fixed. SIP can deliver higher returns, but only if you stay invested for decades.
3. Taxes: PPF is fully tax-free. SIPs offer tax benefits only if you choose ELSS funds, but profits above ₹1 lakh yearly are taxed at 10%.
Smart Retirement Strategy
Combine both:
Put ₹1.5 lakh yearly in PPF for safe, tax-free returns.
Invest extra savings in SIPs to beat inflation and grow wealth faster.
Key Takeaway
Start early. Compounding works best over decades. With ₹12,500/month, PPF may give you ₹1–2.75 crore, while SIP may grow to ₹2–6 crore+. Use both wisely for a stable and rewarding retirement.
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