PPF is a government-backed savings scheme with fixed, tax-free returns. A mutual-fund SIP invests in the market, with higher potential returns but no guarantee. Here is how investing ₹1.5 lakh a year compares over 15 years.
Scenario: ₹1,50,000 a year for 15 years — PPF at 7.1% versus an equity SIP of ₹12,500/month assumed at 12%.
Side-by-side comparison
| Metric | PPF | Equity SIP |
|---|---|---|
| Maturity value | ₹40,68,209 | ₹63,07,200 |
| Total invested | ₹22,50,000 | ₹22,50,000 |
PPF vs Equity SIP at a glance
| PPF | Equity SIP | |
|---|---|---|
| Returns | Fixed, set by the government | Market-linked, not guaranteed |
| Risk | Virtually none | Market risk (can fall short term) |
| Tax | Tax-free (EEE) | Capital-gains tax on equity gains |
| Lock-in | 15 years | None (open-ended) |
| Best for | Safe, tax-free long-term core | Long-term growth above inflation |
The verdict
At assumed historical returns, an equity SIP can grow to noticeably more than PPF over 15 years — but those returns are not guaranteed and the value swings along the way. PPF gives certainty and tax-free growth with zero market risk. Most planners use both: PPF as the safe, tax-free anchor and SIPs for long-term growth. Treat the SIP figure as an estimate, not a promise.
Model your own numbers with the PPF Calculator and the SIP Calculator.