Live calculator: PPF (7.1% EEE guaranteed) vs ELSS (12–15% CAGR, 3-yr lock-in). See post-tax corpus difference at your tax slab.
| Factor | PPF | ELSS |
|---|---|---|
| Lock-in Period | 15 years (partial after 5yr) | 3 years (shortest lock-in) |
| Expected Return | 7.1% p.a. (govt guaranteed) | 12–15% CAGR (not guaranteed) |
| Tax on Returns | EEE — 100% tax-free | LTCG 12.5% above ₹1.25L gains |
| Max Annual Limit | ₹1.5 lakh | No upper limit (80C up to ₹1.5L) |
| 80C Deduction | Yes — up to ₹1.5L | Yes — up to ₹1.5L |
| Risk Level | Zero — government backed | Moderate-High — market linked |
| SIP Option | ₹500/month minimum | ₹500/month minimum |
| Best For | Safe, guaranteed, EEE tax | Wealth creation, higher returns |
Both PPF and ELSS qualify for Section 80C deduction up to ₹1.5 lakh. But they differ dramatically in returns, lock-in, risk and tax treatment. PPF offers guaranteed 7.1% with full EEE status. ELSS has historically returned 12–15% CAGR with only a 3-year lock-in but carries market risk and LTCG tax above ₹1.25 lakh.
Over any 10-year period in Indian history, ELSS (equity) has outperformed PPF. The best Nifty 50 rolling 10-year CAGR is 19.4%, worst is 8.2%, average is 12.8% — all significantly above PPF at 7.1–8%. However, PPF is guaranteed while ELSS returns are market-dependent.
Yes, and for most investors in the 30% slab, investing in both is optimal. ELSS for the 80C benefit + higher returns, and PPF for a guaranteed, tax-free debt component in your portfolio. There is no rule against holding both simultaneously.
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