When planning for retirement, two popular investment options come to mind: Systematic Investment Plan (SIP) and the National Pension System (NPS). Both are market-linked schemes that offer the potential for significant long-term growth. While SIP allows you to invest in mutual funds through a fixed monthly contribution, NPS is designed to help you save for retirement with the added benefit of pension income post-retirement. In this article, we will compare these 2 and evaluate which one generates a higher corpus for a ₹10,000 monthly investment over 30 years.
To compare the potential returns from both NPS and SIP, let’s assume a monthly investment of ₹10,000 for 30 years. We’ll consider a conservative annual return of 10% for NPS and a slightly higher return of 12% for SIP to account for the higher potential equity exposure in SIPs.
Here’s the calculation of NPS and SIP using the NPS and SIP calculators from Angel One.
| Investment Type | Monthly Contribution | Annual Return | Total Investment | Future Value | Estimated Returns |
| NPS | ₹10,000 | 10% | ₹36,00,000 | ₹1,84,44,741 | ₹1,48,44,741 |
| SIP | ₹10,000 | 12% | ₹36,00,000 | ₹3,52,99,138 | ₹3,16,99,138 |
Read More: NPS vs Mutual Fund: Meaning and Key Differences.
Both NPS and SIP offer market-linked growth, but SIPs, with their higher equity exposure and compounding effect, seem to generate a significantly larger corpus over the long term. While NPS is a more conservative and tax-efficient choice for retirement savings, SIPs provide the potential for higher returns, especially if you are comfortable with market volatility.
The ultimate decision between NPS and SIP will depend on your risk appetite, investment goals, and the level of flexibility you desire. Both options offer unique benefits, and understanding their potential over 30 years can help you make an informed choice about which investment strategy suits your financial objectives.
Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions.
Investments in the securities market are subject to market risks, read all the related documents carefully before investing.
Published on: Apr 29, 2025, 4:24 PM IST
Team Angel One
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