Detailed comparison of PPF (7.1% tax-free) and ELSS Mutual Funds (12 - 15 (historical average)%) to help you choose the right investment.
| Year | Deposit | Interest | Balance |
|---|
| Feature | PPF | ELSS |
|---|---|---|
| Returns | 7.1% p.a. (guaranteed) | 12 - 15 (historical average)% |
| Lock-in Period | 15 Years | 3 years |
| Tax on Returns | Fully Tax-Free (EEE) | LTCG above ₹1.25 lakh taxed at 12.5% |
| Section 80C | Yes (up to ₹1.5 lakh) | Yes (up to ₹1.5 lakh) |
| Risk Level | Zero (Govt backed) | High (equity market linked) |
| Liquidity | Low (partial after 7 years) | Low (3-year lock-in, then liquid) |
| Best For | Long-term tax-free guaranteed growth | Higher risk appetite, long-term wealth creation |
ELSS offers potentially higher returns but with market risk. PPF is guaranteed and fully tax-free — ideal for conservative investors.
See how much your PPF investment can grow over different tenures:
| Yearly Deposit | Total Deposited | Interest Earned | Maturity Value |
|---|---|---|---|
| ₹500/yr | ₹7,500 | ₹6,063 | ₹13,563 |
| ₹1,000/yr | ₹15,000 | ₹12,121 | ₹27,121 |
| ₹2,000/yr | ₹30,000 | ₹24,241 | ₹54,241 |
| ₹3,000/yr | ₹45,000 | ₹36,363 | ₹81,363 |
| ₹5,000/yr | ₹75,000 | ₹60,606 | ₹1,35,606 |
| ₹10,000/yr | ₹1,50,000 | ₹1,21,215 | ₹2,71,215 |
| ₹12,000/yr | ₹1,80,000 | ₹1,45,455 | ₹3,25,455 |
| ₹15,000/yr | ₹2,25,000 | ₹1,81,823 | ₹4,06,823 |
| ₹20,000/yr | ₹3,00,000 | ₹2,42,428 | ₹5,42,428 |
| ₹25,000/yr | ₹3,75,000 | ₹3,03,036 | ₹6,78,036 |
| ₹30,000/yr | ₹4,50,000 | ₹3,63,638 | ₹8,13,638 |
| ₹40,000/yr | ₹6,00,000 | ₹4,84,858 | ₹10,84,858 |
| ₹50,000/yr | ₹7,50,000 | ₹6,06,070 | ₹13,56,070 |
| ₹60,000/yr | ₹9,00,000 | ₹7,27,283 | ₹16,27,283 |
| ₹70,000/yr | ₹10,50,000 | ₹8,48,497 | ₹18,98,497 |
| ₹80,000/yr | ₹12,00,000 | ₹9,69,708 | ₹21,69,708 |
| ₹90,000/yr | ₹13,50,000 | ₹10,90,925 | ₹24,40,925 |
| ₹1,00,000/yr | ₹15,00,000 | ₹12,12,139 | ₹27,12,139 |
| ₹1,20,000/yr | ₹18,00,000 | ₹14,54,569 | ₹32,54,569 |
| ₹1,50,000/yr | ₹22,50,000 | ₹18,18,208 | ₹40,68,208 |
PPF offers 7.1% guaranteed tax-free returns with a 15-year lock-in, while ELSS offers 12 - 15 (historical average)% returns with 3 years lock-in. PPF has EEE tax status making it fully tax-free, whereas ELSS: LTCG above ₹1.25 lakh taxed at 12.5%.
ELSS offers potentially higher returns but with market risk. PPF is guaranteed and fully tax-free — ideal for conservative investors.
Yes, you can invest in both PPF and ELSS. However, the combined Section 80C deduction limit is ₹1,50,000 per year. Many investors diversify across both instruments to balance risk and returns.
PPF is backed by the Government of India and carries zero risk with guaranteed returns. ELSS has high (equity market linked) risk. If capital preservation is your priority, PPF is the safer choice.
PPF has EEE status — deposits, interest, and maturity are all tax-free. ELSS Section 80C: Yes (up to ₹1.5 lakh). Tax on returns: LTCG above ₹1.25 lakh taxed at 12.5%.