PPF vs Mutual Fund — which is better?
Guaranteed and tax-free vs market growth — which actually leaves you richer over the long run?
The verdict (₹10,000/mo · 20 years · 30% slab)
Equity Mutual Fund leaves you richer — about ₹26.08L in today's money, ~₹9.98L more than PPF, after tax and inflation.
Equity Mutual Fund wins on growth but carries risk; PPF is safer. 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
Equity Mutual Fund
Best for money you can leave for 5+ years and want to grow.
- ✅ Highest long-run growth (~11–12%)
- ✅ Fully liquid (redeem anytime; ELSS 3y)
- ✅ Only gains taxed — 12.5% LTCG over ₹1.25L/yr
- ⚠️ Market risk — can fall over short horizons
- ⚠️ Returns not guaranteed
- ⚠️ Needs discipline to stay invested
Compare on your own numbers
This shows all four options — PPF and Equity Mutual Fund 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 Mutual Fund — FAQ
PPF vs Mutual Fund — which is better?
It depends on your horizon, tax slab and risk appetite. For ₹10,000 a month over 20 years, Equity Mutual Fund leaves you with about ₹26.08L in today's money — roughly ₹9.98L more than PPF after tax and inflation. But Equity Mutual Fund carries market risk, while PPF is safer. Change the amount, years and slab in the calculator to see the answer for your situation.
Is PPF better than Equity Mutual Fund for returns?
PPF is best for a safe, tax-free base you won't need for 15 years; Equity Mutual Fund is best for money you can leave for 5+ years and want to grow. 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 Equity Mutual Fund?
Choose PPF if you want a safe, tax-free base you won't need for 15 years; choose Equity Mutual Fund if you want money you can leave for 5+ years and want to grow. 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.