Detailed Analysis
SIP and PPF serve different roles in your financial plan. SIP targets wealth creation through market participation, while PPF provides guaranteed, tax-free returns.
SIP in equity mutual funds has historically delivered 12-15% CAGR over 15+ year periods. The power of compounding at higher rates makes a dramatic difference — ₹10,000/month at 12% for 15 years = ₹50.5 lakh vs ₹33.5 lakh at PPF's 7.1%.
PPF offers the rare EEE (Exempt-Exempt-Exempt) tax status — investment, interest, and maturity are all tax-free. This makes the effective post-tax return very competitive, especially for those in the 30% tax bracket.