Compare market-linked SIP investing with PPF-style fixed-income saving.
SIP vs PPF comparison
Compare projected maturity values using your own return assumptions.
SIP
Useful for long-term market-linked wealth creation. A SIP invests a fixed amount in a mutual fund every month, so you buy more units when prices are low and fewer when they are high.
Returns can fluctuate and are not guaranteed. Equity fund gains are short-term if units are sold within 12 months and taxed at 20%, and long-term after more than 12 months, taxed at 12.5% on gains above ₹1.25 lakh a year. Each SIP instalment has its own holding period.
You can usually redeem at any time, though exit loads may apply early on. ELSS tax-saver funds are the exception: each instalment is locked for three years, and they qualify for 80C under the old regime.
PPF
Useful for long-term, tax-oriented savings with a known product structure. PPF is a government-backed scheme with a 15-year term, extendable in five-year blocks, and deposits of ₹500 to ₹1.5 lakh a year.
The rate is notified every quarter and is 7.1% for October–December 2026. Interest and maturity are tax-free, and deposits qualify for 80C under the old regime. Under the new regime the deduction is lost but the interest stays tax-free.
Rates can change over time and liquidity is limited. Loans against the balance are allowed from the third to the sixth year, and partial withdrawals open up from the seventh year.
Worked Comparison
Put ₹1.5 lakh a year into PPF for 15 years at 7.1% and the projected maturity is about ₹40.7 lakh on ₹22.5 lakh invested, assuming the rate stays the same.
Invest ₹12,500 a month, the same yearly amount, through a SIP for 15 years and the projection is about ₹52.2 lakh at an assumed 10% annual return, or ₹63.1 lakh at 12%. Those returns are assumptions, not promises: a weak final few years can pull the result down sharply, and the gain is taxable when you sell.
When Each One Fits
PPF suits money you want safe and tax-free for 15 years or more, such as the stable part of retirement savings or a child's long-term fund. SIPs suit long-term goals where you can sit through market falls without selling.
Neither is ideal for an emergency fund: PPF money is locked, and SIP values can be down exactly when you need the cash.
Use Both Carefully
Many households use PPF for stable long-term savings and SIPs for growth goals.
Decide the mix by goal, not by tax. Run the SIP Calculator and PPF Calculator with the same yearly amount and horizon, try a lower return assumption for the SIP, and use the 80C Deduction Calculator only if you file under the old regime.