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Mutual Fund SIP Vs PPF: Investing in both a Public Provident Fund (PPF) and a Systematic Investment Plan (SIP) in mutual funds can help you build a solid financial foundation over time. PPF is a safe bet backed by the government and offers a guaranteed return of 7.1 per cent. On the other hand, mutual fund SIPs can be a bit more unpredictable due to market changes, but they have become very popular as they often provide higher returns, usually between 12 and 14 per cent per year.

When you look at long-term investments, such as over 15 years, each of these options has its advantages PPF has a mandatory lock-in period of 15 years, which encourages you to save consistently, while SIPs in mutual funds give you more flexibility. But, they are best for a long-term strategy to help manage the ups and downs of that market.

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Let’s assume an annual investment of Rs 65,000 to get a clearer picture of how investments in both schemes can grow. Over 15 years, that adds up to Rs 9,75,000. If we consider a return of 7.1 per cent from the PPF, the interest earned on this amount would be around Rs 7,87,891, bringing the total to Rs 17,62,891.

On the other hand, if you invest the same amount in a mutual fund SIP, which has an estimated return of 12 to 14 per cent, the interest earned would be around Rs 17,57,904, bringing the total fund to Rs 27,32,784.

Mutual fund SIPs can potentially give higher returns than PPFs. However, it is important to think about your risk tolerance, financial goals, and liquidity needs when deciding where to invest. While PPF provides guaranteed and stable returns, SIPs open the door to wealth creation through market-linked growth. A well-rounded strategy that incorporates both investment options can lead to financial security and better returns over time.

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Disclaimer: Investing in mutual funds involves market risk, and returns can fluctuate based on market conditions.