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PPF vs FD — guaranteed and tax-free, or flexible and taxed?

PPF beats FD on being fully tax-free at maturity, but locks your money in for 15 years with a contribution cap. FD is flexible but its interest is taxed at your slab rate. Compare both on the same contribution.

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PPF Calculator vs FD 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
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.

Fixed Deposit (FD)

A lump sum deposited with a bank for a fixed tenure at a fixed, guaranteed interest rate.

PROS
Fully guaranteed return — no market risk
Predictable maturity value known upfront
Widely available and simple to open
CONS
Interest is fully taxable at your slab rate every year it accrues
Return is capped — no upside beyond the fixed rate
Early withdrawal usually triggers a penalty

Best for: Capital you can't afford to risk — an emergency fund, or a short-term goal within a couple of years.

Questions
Is PPF's return really tax-free?

Yes — PPF falls under EEE (Exempt-Exempt-Exempt) tax treatment in India: contributions, interest, and maturity amount are all tax-free, which is a real advantage over FD interest, which is fully taxable.

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.