Detailed comparison of PPF (7.1% tax-free) and Fixed Deposit (FD) (6.5 - 7.5%) to help you choose the right investment.
| Year | Deposit | Interest | Balance |
|---|
| Feature | PPF | FD |
|---|---|---|
| Returns | 7.1% p.a. (guaranteed) | 6.5 - 7.5% |
| Lock-in Period | 15 Years | Flexible (7 days to 10 years) |
| Tax on Returns | Fully Tax-Free (EEE) | Taxable as per income slab |
| Section 80C | Yes (up to ₹1.5 lakh) | Yes (5-year tax-saving FD only) |
| Risk Level | Zero (Govt backed) | Low |
| Liquidity | Low (partial after 7 years) | High (premature withdrawal with penalty) |
| Best For | Long-term tax-free guaranteed growth | Short to medium-term parking of funds |
PPF offers higher post-tax returns due to EEE status. FD is better for short-term needs and flexibility.
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 FD offers 6.5 - 7.5% returns with Flexible (7 days to 10 years) lock-in. PPF has EEE tax status making it fully tax-free, whereas FD: Taxable as per income slab.
PPF offers higher post-tax returns due to EEE status. FD is better for short-term needs and flexibility.
Yes, you can invest in both PPF and FD. 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. FD has low risk. If capital preservation is your priority, PPF is the safer choice.
PPF has EEE status — deposits, interest, and maturity are all tax-free. FD Section 80C: Yes (5-year tax-saving FD only). Tax on returns: Taxable as per income slab.