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

Yogesh NegiYogesh Negi
2 min read

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 PeriodPPFSIP
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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Yogesh Negi
Yogesh Negi