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Government Bonds vs PPF — which guaranteed option is better?

Both are government-backed, but PPF is tax-free at maturity while bond interest is typically taxable. Compare both on the same amount and horizon.

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Government Bonds vs PPF Calculator15-year comparison

Opens Compare Lab pre-loaded with both, in your own currency — adjust any input and the chart updates instantly.

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How each one actually works
Government Bonds

Debt issued by the government, paying a fixed coupon over a set tenure, backed by sovereign credit.

PROS
Among the lowest-risk investments available — sovereign backing
Predictable, fixed coupon income
Tenure options span from a few years to several decades
CONS
Coupon interest is typically taxable at your slab rate
Real (inflation-adjusted) return can be thin
Selling before maturity depends on prevailing rates and market liquidity

Best for: The safest portion of a fixed-income allocation, especially for capital you want protected above all else.

PPF (Public Provident Fund)

A government-backed, long-term savings scheme with a 15-year lock-in, a capped annual contribution, and fully tax-free interest and maturity.

PROS
Fully tax-free — contribution, interest, and maturity (EEE status)
Government-guaranteed, effectively zero credit risk
Rate is typically higher than most bank FDs
CONS
15-year lock-in with only limited partial withdrawal after year 7
Annual contribution capped (currently ₹1.5 lakh)
Rate is revised quarterly by the government and can fall

Best for: The guaranteed, tax-free core of a long-term goal like retirement, where you can commit to the lock-in.

Questions
Is PPF always better than government bonds since it's tax-free?

Often for long-term goals, yes — but PPF caps annual contributions and locks funds for 15 years, while bonds offer more flexible tenure options and no contribution cap, which matters if you have a larger amount to place.

Where do these numbers actually come from?

The same calculation engine that powers our standalone calculators and Compare Lab — nothing here is a separate or simplified estimate. Every assumption (rate, tenure, tax) is visible and adjustable once you open the comparison with your own numbers.

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All figures are illustrative projections based on the assumptions you select, not guaranteed returns. Validate tax and scheme rules before making financial decisions.