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SIP vs PPF
The same amount each year into an equity SIP versus PPF. PPF is tax-free and government-backed; the SIP aims higher but carries market risk.
Equity SIP vs PPF (EEE) · same yearly outlayPPF is a 15-year, government-backed scheme with annual compounding and fully tax-free returns (the EEE regime — exempt on contribution, growth and withdrawal). Its rate is reset every quarter (currently around 7.1%). An equity SIP targets higher returns but is exposed to market swings and taxed on gains. PPF suits the safe, debt portion of a portfolio; equity SIPs drive long-term growth. Most investors use both.
Frequently asked
- Should I choose SIP or PPF?
- They serve different roles. PPF is a safe, tax-free, debt-like anchor with a 15-year lock-in. An equity SIP is for long-term growth and liquidity but carries risk. A common approach is to hold PPF for stability and run equity SIPs for wealth creation.
- Is PPF really tax-free?
- Yes. PPF falls under the EEE regime: contributions qualify for deduction under Section 80C, the interest earned is exempt, and the maturity amount is tax-free. SIP gains, by contrast, attract capital-gains tax.
- What is the PPF contribution limit?
- You can invest a maximum of ₹1.5 lakh per financial year in PPF. The calculator caps the yearly input at this limit.