SIP vs. PPF
When saving and growing money in India, SIP (Systematic Investment
Read more
SIP Plan Benefits
Start SIP with as low as ₹1000
No hidden charges
Save upto ₹46,800 in Taxunder section 80C^
Zero LTCG Tax¶
Disciplined & worry-free investing
What is SIP?
SIP stands for Systematic Investment Plan, a method of investing a fixed amount regularly in mutual funds. It allows you to invest a fixed amount of money at regular intervals (e.g., monthly, quarterly) instead of making a lump-sum investment.
Benefits of SIP:
- Encourages discipline in saving and investing, helping create a long-term habit from the start of your career.
- Ideal for long-term financial goals like retirement, buying a house, or funding education.
- Benefits from the power of compounding and rupee cost averaging, boosting wealth over time.
- Allows gradual market entry and diversification, reducing the impact of market volatility compared to lump-sum investments.
- Supports consistent investing without worrying about market timing, making it a reliable tool for long-term wealth creation.
- Insurance Companies
- Mutual Funds
|
Returns |
| Fund Name |
5 Years |
7 Years |
10 Years |
| SBI Life |
14.17% |
13.42% |
|
| HDFC Life |
19.25% |
16.6% |
|
| Axis Max Life |
28% |
22.83% |
|
| ICICI Prudential Life |
17.82% |
15.22% |
|
| Tata AIA Life |
23.18% |
22.63% |
|
| Bajaj Life |
18.69% |
14.84% |
|
| Birla Sun Life |
20.85% |
17.04% |
|
| PNB MetLife |
31.41% |
24.68% |
|
| Canara HSBC Life |
13.88% |
12.17% |
|
| Star Union Dai-ichi Life |
16.95% |
- |
|
Fund rating powered by
Last updated: Nov 2025
| |
Returns |
| Fund Name |
3 Years |
5 Years |
10 Years |
| QUANT |
23.92% |
31.48% |
|
| PARAG PARIKH |
20.69% |
26.41% |
|
| EDELWEISS |
22.34% |
24.29% |
|
| KOTAK |
24.64% |
25.01% |
|
| MIRAE ASSET |
19.74% |
24.32% |
|
| PGIM INDIA |
14.75% |
23.39% |
|
| DSP |
18.41% |
22.33% |
|
| CANARA ROBECO |
20.05% |
21.80% |
|
| SUNDARAM |
18.27% |
18.22% |
|
Last updated: October 2025
Who Should Invest in SIP Plans?
Below are the people who should consider investing in SIP Plans:
- Young professionals or anyone with long-term goals like retirement or children’s education.
- Those willing to take moderate or high risk for higher returns.
- Ideal for those with limited knowledge of market trends.
- Regular income earners can align SIPs with their monthly budget to save consistently.
What is Public Provident Fund (PPF)?
The Public Provident Fund (PPF) is a long-term investment scheme introduced by the Government of India to encourage small savings while offering attractive returns. It is a tax-saving instrument that allows individuals to invest with a minimum of ₹500, with contributions eligible for tax deductions under the Income Tax Act. The scheme provides a fixed interest rate, compounded annually, and the maturity amount, along with the interest earned, is entirely tax-free. Backed by government security, PPF is a low-risk investment option suitable for those seeking a safe avenue to grow their wealth steadily while enjoying tax benefits.
Benefits of a PPF Account:
- PPF is a government-backed and secure long-term savings scheme with guaranteed returns.
- Annual contribution ranges from ₹500 to ₹1.5 lakh.
- Interest rate of 7.1% per year in 2025, which is compounded annually.
- The tenure of a 15-year lock-in, extendable in 5-year blocks.
- Partial withdrawals are allowed from your PPF Account after the 6th year.
- Tax benefits: Contributions, interest, and maturity amounts are fully tax-free under Section 80C.
Who Should Invest in PPF?
Here is who should consider investing in PPF:
- Ideal for long-term goals like retirement, children’s education, or financial security.
- Can supplement EPF for employees.
- Parents can open accounts for minors.
- Young earners can build a habit of disciplined saving.
SIP vs PPF: What is the Difference
Learn the key differences between the SIP and PPF from the table below:
| Features |
Systematic Investment Plan (SIP) |
Public Provident Fund (PPF) |
| Returns |
Market-linked; can be high (10–12%+ historically) |
Fixed at 7.1% p.a. |
| Risk |
Moderate to high due to market fluctuations |
Very low (government-backed) |
| Investment Amount |
Flexible monthly amounts (₹500/month minimum, depends on fund) |
₹500–1.5 lakh/year |
| Tenure |
Flexible; ELSS SIPs have 3-year lock-in |
15 years mandatory |
| Liquidity |
High; can redeem anytime (except lock-in ELSS) |
Low; partial withdrawals allowed only after 6 years |
| Tax Benefit |
Only ELSS SIPs are eligible under Section 80C; gains may be taxed |
Fully tax-free (EEE); contributions qualify for Section 80C |
| Wealth Creation Potential |
High potential due to equity exposure |
Moderate, steady growth |
| Tax Saving Potential |
Limited to ELSS SIPs |
Maximum tax benefit |
| Pros |
High growth potential; flexible; easy to redeem; builds long-term investment habit |
Safe, guaranteed returns; fully tax-free; encourages long-term savings |
| Cons |
No guaranteed returns; subject to market risk; gains may be taxable |
Long lock-in (15 years); limited annual contribution; returns lower than equities |
| Best For |
Long-term wealth creation and disciplined investing |
Safe, tax-efficient long-term savings |
SIP Calculator
Monthly Investment
₹22.4 L
Top Funds with High Returns (Past 7 Years)
13.02%
Equity Pension
15.49%
Global Equity Index Funds Strategy
19.4%
High Growth Fund
13.27%
Opportunities Fund
20.94%
Multi Cap Fund
14.43%
Accelerator Mid-Cap Fund II
16.04%
Multiplier
14.62%
Frontline Equity Fund
18.41%
Pension Mid Cap Fund
11.3%
Growth Plus Fund
14.82%
US Equity Fund
15%
Growth Opportunities Plus Fund
11.81%
Equity Top 250 Fund
14.1%
Future Apex Fund
11.97%
Pension Dynamic Equity Fund
14.42%
Pension Enhanced Equity
Example of SIP vs PPF Calculation
To understand the difference between SIP and PPF clearly, let’s take a simple example where a person invests ₹1,50,000 every year for 15 years in both options.
-
Example of PPF Calculation
- Annual Investment = ₹1,50,000
- Interest Rate = 7.1% p.a. (2025)
- Tenure = 15 years
- We get the following result using a PPF Calculator:
- Total Investment = ₹22,50,000
- Interest Earned = ₹18,18,208
- Maturity Amount = ₹40,68,208
-
Example of SIP Calculator
- Annual Investment = ₹1,50,000
- Period = 15 years
- Expected Return = 12% p.a.
- We get the following result using a SIP Calculator:
- Total Investment = ₹22,50,000
- Interest Earned = ₹62,60,000
- Maturity Amount = ₹40,10,000
Who Should Choose Which Among SIP vs PPF?
| Situation |
Best Option |
| Young, focused on wealth creation |
SIP (equity mutual funds) |
| Risk-averse, wants safe returns |
PPF |
| Wants growth + safety |
Combination of SIP + PPF |
| Maximum tax savings |
PPF + ELSS SIP |
| Balanced Approach |
Combine both SIP and PPF according to your goals, age, and risk tolerance. |
SIP Calculator vs PPF Calculator
What is a SIP Calculator?
A SIP Calculator helps you estimate how much wealth you can build by investing a fixed amount regularly through SIPs. By entering your monthly amount, expected return rate, and duration, it shows your future investment value using compounding. It makes planning your financial goals easier.
What is a PPF Calculator?
A PPF Calculator helps you find out how much your PPF savings will grow by maturity. You enter your yearly deposit, interest rate, and the 15-year tenure. The tool calculates your final amount with annual compounding, helping you plan long-term savings better.
List of Top 10 SIP Plans in India in 2025
The following table lists the best SIP plans available in India to choose from in 2025:
Conclusion
Choosing between SIP and PPF depends on your risk level and goals. SIP is good if you want higher returns and can handle market ups and downs. PPF is good if you want safety and tax-free guaranteed returns. Many investors use both options. SIP helps your money grow faster, and PPF gives stability. Together, they create a balanced long-term plan.
FAQs
-
Is SIP riskier than PPF?
Yes, SIP is riskier as it is linked to market performance, and returns are not guaranteed. In contrast, PPF is a risk-free investment backed by the government.
-
Can I withdraw money early from SIP or PPF?
- SIP: You can withdraw or stop investing at any time, though it may impact your financial goals.
- PPF: Partial withdrawals are allowed after the sixth year, subject to specific conditions. Premature closure is permitted in rare cases like medical emergencies.
-
How do SIP and PPF perform during market fluctuations?
- SIP: The SIP performance depends on market conditions. During market downturns, SIPs benefit from rupee cost averaging by buying more units at lower prices, which can result in higher returns when markets recover.
- PPF: PPF is not affected by market fluctuations as its returns are fixed and government-guaranteed, ensuring stability even during economic uncertainties.
-
Can NRIs invest in SIP and PPF?
- SIP: Yes, NRIs can invest in SIPs in India through their NRE or NRO accounts.
- PPF: NRIs cannot open new PPF accounts. However, they can continue contributing to an existing PPF account until its maturity.
-
Which gives higher returns in SIP vs PPF?
SIP vs PPF returns differ because SIP can give higher long-term returns, but PPF gives stable 7.1% guaranteed returns.
-
Which is safer in SIP vs PPF?
PPF is safer in SIP vs PPF because it is government-backed and risk-free, while SIP carries market risk.
-
Which is better for tax saving in SIP vs PPF?
PPF is better for tax saving in SIP vs PPF because it offers full tax benefits on contribution, interest, and maturity.
-
Can beginners invest easily in SIP vs PPF?
Yes, beginners can invest in both SIP vs PPF because SIP allows small monthly amounts and PPF starts with just ₹500 per year.
-
What is the lock-in period in SIP vs PPF?
In SIP vs PPF, SIP has no lock-in except ELSS funds, while PPF has a 15-year lock-in period.
-
Which is more flexible in SIP vs PPF?
SIP is more flexible in SIP vs PPF because you can start, stop, or change the amount anytime.
