ELSS vs PPF Calculator — Which Tax Saver Gives Better Returns? — India 2026
Compare ELSS mutual funds with PPF for Section 80C tax saving. See returns risk lock-in period and tax treatment side by side over 10 15 and 20 years.
Section 80C allows Rs 1.5 lakh deduction for tax saving investments but choosing between ELSS and PPF can be confusing. ELSS offers higher potential returns (12-15% CAGR) with only 3-year lock-in but with market risk. PPF gives guaranteed returns (7.1% currently) with 15-year lock-in and completely tax-free maturity. The right choice depends on your risk tolerance time horizon and existing investments.
ELSS vs PPF returns over 20 years?
Investing Rs 1.5 lakh annually: PPF at 7.1% for 20 years grows to approximately Rs 66 lakh. ELSS at 12% for 20 years grows to approximately Rs 1.21 crore and at 15% to Rs 1.72 crore. Even at a conservative 10% ELSS gives Rs 95 lakh beating PPF by Rs 29 lakh. However PPF returns are guaranteed while ELSS returns depend on market performance and fund selection.
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SIP Calculator
Understanding Your Investment Returns
This calculator projects your returns using compound interest, where your earnings generate their own earnings over time. The power of compounding means that even small regular investments can grow into substantial wealth over long periods. For example, investing just Rs 5,000 per month at 12% expected returns for 25 years can grow to over Rs 1 crore — of which only Rs 15 lakh is your own money and Rs 85 lakh is compounding returns. The key factors that determine your final corpus are: the amount invested, the rate of return, the duration of investment, and the frequency of compounding.
Important Considerations
Past returns do not guarantee future performance, especially for market-linked instruments like mutual funds and equities. The returns shown are estimates based on the rate you enter. Equity investments carry market risk but have historically delivered 12-15% CAGR over 15+ year periods in India. Fixed income options like PPF (7.1%) and FD (6-7.5%) offer lower but more predictable returns. Diversifying across asset classes — equity, debt, gold, and real estate — reduces overall portfolio risk while optimizing returns for your risk tolerance.
Key Information
| Parameter | Details |
|---|---|
| ELSS Historical Returns | 12% - 15% CAGR (10-year average) |
| PPF Interest Rate | 7.1% per annum (2026) |
| ELSS Lock-In Period | 3 years |
| PPF Lock-In Period | 15 years (extendable in 5-year blocks) |
Compare ELSS and PPF returns
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Use Calculator NowFrequently Asked Questions
ELSS vs PPF returns over 20 years?
Investing Rs 1.5 lakh annually: PPF at 7.1% for 20 years grows to approximately Rs 66 lakh. ELSS at 12% for 20 years grows to approximately Rs 1.21 crore and at 15% to Rs 1.72 crore. Even at a conservative 10% ELSS gives Rs 95 lakh beating PPF by Rs 29 lakh. However PPF returns are guaranteed while ELSS returns depend on market performance and fund selection.
Can I invest in both ELSS and PPF?
Yes and this is often the best strategy. The Rs 1.5 lakh 80C limit can be split between both. Conservative approach: Rs 1 lakh PPF + Rs 50000 ELSS. Balanced: Rs 75000 each. Aggressive: Rs 50000 PPF + Rs 1 lakh ELSS. PPF provides guaranteed returns and stability while ELSS adds growth potential. Your EPF contribution also counts toward 80C reducing the remaining amount for PPF and ELSS.
Is ELSS risky for tax saving?
ELSS invests in equity markets so short-term volatility exists. However with the mandatory 3-year lock-in historical data shows very few instances of negative returns over 3-year periods. Over 5+ years ELSS has consistently beaten fixed income options. For tax saving purposes ELSS offers the shortest lock-in period of any 80C investment making it the most liquid option after 3 years.
What is compound interest and why does it matter?
Compound interest means you earn interest on your interest, not just your principal. Over long periods, this creates exponential growth — even small regular investments can grow into substantial wealth over 15-25 years.
Is SIP better than lumpsum investment?
SIP invests a fixed amount monthly, averaging out market volatility through rupee cost averaging. Lumpsum works better when markets are low. For most investors, SIP builds discipline and removes the need to time the market.
How much should I invest monthly to become a crorepati?
At 12% expected returns, a monthly SIP of Rs 5,000 for 30 years grows to approximately Rs 1.76 crore. Increasing your SIP by 10% annually makes the corpus even larger. Start early, stay consistent.
Are investment returns taxable?
PPF returns are tax-free. Equity mutual fund LTCG above Rs 1.25 lakh/year is taxed at 12.5%. FD interest is taxed at your slab rate. NPS offers an additional Rs 50,000 deduction under 80CCD(1B).
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Last updated: March 2026