Systematic investment plan returns pip those from fixed deposits and PPFs

By Prashant Mahesh & Rathina Sabapathy

Regular investments in mutual fund equity schemes have been rewarding for investors in the last 15 years. Investments in equity schemes done through systematic investment plans (SIPs) have outperformed traditional products such as fixed deposits and public provident fund (PPF).

Tax-saving fixed deposits and PPF have returned a little over 9 per cent every year in the last 20 years. Meanwhile, average returns in equity schemes through SIPs — an equivalent of recurring fixed deposits of banks — over a 15-year period have been 21.54 per cent every year with the worst performer giving 13.71 per cent.