PPF vs FD Calculator — Compare Returns Tax and Liquidity — India 2026
Compare PPF and Fixed Deposit returns side by side. See which gives better post-tax returns over 5 10 and 15 years.
PPF at 7.1% and bank FD at 7% seem similar on surface but differ dramatically in post-tax returns. PPF interest is completely tax-free while FD interest is taxed at your income tax slab rate. For someone in the 30% tax bracket: PPF effective return remains 7.1% while FD effective return drops to 4.9%. Over 15 years this difference compounds to lakhs in extra wealth from PPF.
PPF vs FD returns over 15 years?
Rs 1.5 lakh annual investment for 15 years: PPF at 7.1% (tax-free) = Rs 40.68 lakh maturity. FD at 7% (30% tax bracket effective 4.9%) = Rs 33.97 lakh. PPF gives Rs 6.71 lakh MORE in your hand due to tax-free compounding. The gap widens with higher tax brackets and longer durations.
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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 |
|---|---|
| PPF Interest Rate | 7.1% (tax-free) |
| FD Interest Rate | 6.5% - 7.5% (fully taxable) |
| PPF Lock-In | 15 years |
| FD Lock-In | 7 days to 10 years |
Compare PPF and FD returns
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Use Calculator NowFrequently Asked Questions
PPF vs FD returns over 15 years?
Rs 1.5 lakh annual investment for 15 years: PPF at 7.1% (tax-free) = Rs 40.68 lakh maturity. FD at 7% (30% tax bracket effective 4.9%) = Rs 33.97 lakh. PPF gives Rs 6.71 lakh MORE in your hand due to tax-free compounding. The gap widens with higher tax brackets and longer durations.
When is FD better than PPF?
FD is better when: you need money within 5 years (PPF has 15-year lock-in). Your income is below taxable limit (FD interest effectively tax-free). You need flexibility to choose tenure. You want monthly income (FD monthly payout). Senior citizens get 0.25-0.50% extra on FD plus higher TDS threshold.
Can I invest in both PPF and FD?
Yes and this is often the best strategy. Use PPF for long-term tax-free wealth building (Rs 1.5L/year for 80C). Use FD for short-term goals emergency fund and monthly income needs. PPF handles your 15-year+ goals while FD handles 1-5 year goals. Both together create a balanced safe portfolio.
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