Reviewed by Artha Research·Last updated 8 April 2026
SIP vs PPF — Which Long-Horizon Winner?
Compare equity SIP against tax-free PPF for the same annual contribution over long horizons.
Your numbers
Same annual contribution, equity SIP vs tax-free PPF.
Winner's corpus
₹1.2Cr
SIP wins
Equity SIPs historically compound faster than PPF over long horizons. At 12% SIP vs 7.1% PPF over 20 years, SIP builds ₹57.1L more.
For most long-horizon investors, a mix wins — PPF as the debt floor, SIP as the equity engine.
SIP vs PPF
SIP
₹1.2Cr
WinnerPPF
₹66.6L
SIP wins by 86%.
SIP corpus
₹1.2Cr
PPF corpus
₹66.6L
Total invested
₹30L
Difference
₹57.1L
Risk ≠ return
PPF is guaranteed. SIP is a projection that depends on market returns. The 'wins' verdict assumes the SIP achieves the stated return — stress-test at 8-10% to see if it still wins.
Don't forget tax
PPF is fully tax-free (EEE). Equity SIP gains above ₹1.25L/year are taxed at 12.5% LTCG. Factor that into the comparison.
Next best actions
The result hints at what to look at next. Each link carries your current numbers so you never re-enter them.
At a glance
- Question answered
- For the same annual contribution, which vehicle builds more wealth at your horizon: equity SIP or tax-free PPF?
- Typical verdict
- At 15+ years with 12% equity vs 7.1% PPF, SIP builds 2-3x more corpus. But PPF is guaranteed and tax-free — SIP is a projection with LTCG at 12.5%.
- Realistic approach
- Most investors should do both, not pick one. PPF provides the debt floor; SIP provides the equity engine. A 70/30 equity-to-debt split is a reasonable starting point.
- Best used for
- Stress-testing how much of your long-horizon corpus should be in equity vs in fixed-income PPF.
How It Works
This is the drill-down layer. The flagship flow leads with a recommendation, and this page lets you inspect the underlying model.
- SIP path: monthly compounding at the stated equity return.
- PPF path: annual compounding at the stated PPF rate, capped at ₹1.5L/year.
- Winner is the vehicle with the higher final corpus at the chosen horizon.
Assumptions
The recommendation stays blunt, but the assumptions remain visible.
- SIP return is a projection; real equity returns vary.
- PPF maturity is tax-free; SIP gains above ₹1.25L/year incur LTCG at 12.5%.
- PPF has a 15-year minimum lock-in; SIP is liquid.
FAQ
The follow-up questions people usually ask after the main recommendation is already clear.
Is SIP riskier than PPF?
Yes — PPF is Government-backed and tax-free. Equity SIP values move with markets and LTCG tax reduces headline returns. But at 15+ year horizons, equity has historically outpaced PPF by 3-5 percentage points.
Should I choose one or the other?
Most people should do both. PPF is your debt floor (tax-free, guaranteed, 80C-eligible). SIP is your equity engine (higher expected return over long horizons). A 70/30 equity-to-debt split is a reasonable starting point.
What if I can only pick one?
For long horizons (15+ years) and an investor who can stomach volatility, SIP usually wins on corpus. For short horizons or risk-averse investors, PPF is the safer choice.
Sources & references
Every formula and assumption above is grounded in these authoritative sources.
Securities and Exchange Board of India
Regulates India's securities markets including mutual funds, ELSS schemes, and listed equity.
Association of Mutual Funds in India
AMFI publishes mutual fund industry data, historical returns, and investor education material.
Ministry of Finance, Government of India
Publishes the annual Union Budget, which sets tax slabs, rebates, and PPF rates each year.
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