PPF vs FD — which is better?
Both safe — but one is fully tax-free and one is taxed every year at your slab.
The verdict (₹10,000/mo · 20 years · 30% slab)
PPF leaves you richer — about ₹16.1L in today's money, ~₹3.73L more than Fixed Deposit, after tax and inflation.
Your answer depends on your numbers — change them below.
PPF
Best for a safe, tax-free base you won't need for 15 years.
- ✅ Completely safe — government-backed
- ✅ Fully tax-free (EEE) — no tax ever
- ✅ Great low-risk anchor for a portfolio
- ⚠️ Caps at ₹1.5 lakh/year
- ⚠️ 15-year lock-in
- ⚠️ ~7% return trails equity over long horizons
Fixed Deposit
Best for short-term money and emergency funds you can't risk.
- ✅ Safe and predictable
- ✅ Flexible tenures, easy to break
- ✅ Good for money you may need soon
- ⚠️ Interest taxed every year at your slab
- ⚠️ Often loses to inflation after tax
- ⚠️ No growth beyond the fixed rate
Compare on your own numbers
This shows all four options — PPF and Fixed Deposit are the two to watch. Edit the amount, years, tax slab and return assumptions.
Assumptions (tweak freely)
For your inputs
Equity Mutual Fund leaves you with the most — about ₹26.08L in today's money, ~₹13.71L more than Fixed Deposit.
You'd invest ₹24,00,000 over 20 years. Figures below are after tax and after 6% inflation — the money you'd actually keep, in today's value. Equity carries market risk; PPF/FD are safe but grow slower.
Equity Mutual Fund
TOP- Nominal corpus
- ₹91.99L
- After tax
- ₹83.64L
- Lock-in
- None (ELSS: 3y)
- Liquidity
- High
- Risk
- High
LTCG 12.5% on gains over ₹1.25L/yr
NPS (Tier-1)
- Nominal corpus
- ₹76.83L
- After tax
- ₹76.83L
- Lock-in
- Till age 60
- Liquidity
- Low
- Risk
- Medium
60% of corpus tax-free; min 20% → taxable annuity · Extra ₹50k deduction under 80CCD(1B)
PPF
- Nominal corpus
- ₹51.63L
- After tax
- ₹51.63L
- Lock-in
- 15 years
- Liquidity
- Low
- Risk
- None
Fully tax-free (EEE)
Fixed Deposit
- Nominal corpus
- ₹49.89L
- After tax
- ₹39.68L
- Lock-in
- Flexible
- Liquidity
- High
- Risk
- None
Interest taxed yearly at your 30% slab
Estimates on your assumptions — real returns vary. NPS locks till 60 and forces an annuity; PPF locks 15 years; equity can fall short over short horizons. This is information, not investment advice.
PPF vs FD — FAQ
PPF vs FD — which is better?
It depends on your horizon, tax slab and risk appetite. For ₹10,000 a month over 20 years, PPF leaves you with about ₹16.1L in today's money — roughly ₹3.73L more than Fixed Deposit after tax and inflation. Change the amount, years and slab in the calculator to see the answer for your situation.
Is PPF better than Fixed Deposit for returns?
PPF is best for a safe, tax-free base you won't need for 15 years; Fixed Deposit is best for short-term money and emergency funds you can't risk. On a like-for-like monthly investment the higher-growth option usually wins the nominal corpus, but the honest comparison is after tax and inflation — which is what the calculator on this page shows. Many investors hold both for different jobs rather than picking one.
Should I choose PPF or Fixed Deposit?
Choose PPF if you want a safe, tax-free base you won't need for 15 years; choose Fixed Deposit if you want short-term money and emergency funds you can't risk. If you can, using both — one for growth and one for safety/tax-efficiency — usually beats an either/or choice. Enter your numbers above to see which leaves you with more.
More comparisons
Estimates on default assumptions — real returns vary. This is information, not investment advice. Verify current rates and tax rules before investing.