PPF gives 7.1% tax-free. FD gives up to 9% — but taxed at your slab. At 30% slab, a 7.1% PPF beats any FD under 10.14%. See the actual post-tax comparison.
📅 Updated March 2026
🧮 Post-Tax Calculator
🏛️ EEE vs Taxable
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🧮 PPF vs FD Calculator
Compare real post-tax returns — PPF (EEE) vs FD (taxed at slab)
Per Year₹1.50 L
₹10K₹1.5L PPF max
Years15 yrs
1yr15yr (PPF min)25yr
PPF Rate7.10%
5%7.1% (current)9%
FD Rate7.50%
5%7.5%9.5%
🏛️ PPF
—
Tax-free maturity (EEE)
🏧 FD
—
After tax on interest
Run calculator to see verdict
Adjust sliders and click Compare.
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PPF Corpus
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FD Post-Tax
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Tax You Save
PPF vs FD — Post-Tax Corpus Growth
Annual investment compounded — PPF tax-free vs FD after slab tax
💰 The PPF Tax Advantage — Break-even FD Rate
At your tax slab, a PPF giving 7.10% is equivalent to an FD giving —. Any FD below this rate gives less after-tax return than PPF.
Strategy Guide
PPF vs FD — Who Should Choose What
🏛️
PPF — Best For
Investors in 20–30% tax slab where tax-free compounding provides massive advantage. Long-term goal savers (15+ years). Those seeking government-backed guaranteed returns. 80C deduction needed alongside interest exemption.
EEE — All three stages tax-free
🏧
FD — Best For
Investors in nil or 5% tax slab where tax impact is minimal. Short-term needs (1–3 years) where PPF lock-in is a problem. Senior citizens with ₹50,000 TDS-free threshold. Those needing liquidity — FD can be broken (with penalty) anytime.
Liquidity + higher nominal rates available
🎯
The Smart Strategy
Max PPF (₹1.5L/yr) for long-term tax-free compounding + 80C benefit. Use FD only for emergency fund or short-term goals where liquidity is needed. At 30% slab, PPF at 7.1% = FD at 10.14% — nearly impossible to find.
PPF for long-term · FD for short-term liquidity
⚠️
PPF Caveat: Lock-in
PPF has 15-year lock-in. Partial withdrawal only after Year 7 (up to 50%). Premature closure allowed after 5 years only for medical/education. If you may need the money within 5–7 years, FD or liquid fund is safer.
Assess liquidity needs before investing in PPF
Full Comparison
PPF vs FD — Complete 2025-26 Analysis
Parameter
🏛️ PPF
🏧 FD
Edge
Current Interest Rate
7.1% p.a. (Govt-declared, Q1 2025-26)
6.5–9.0% (varies by bank)
FD (nominally) 🏧
Tax on Interest
Fully exempt — EEE status
Taxed at income slab every year
PPF 🏛️
Post-Tax Return (30% slab)
7.1% (full)
~5.25% (at 7.5% FD rate)
PPF 🏛️
80C Deduction
Yes — up to ₹1.5L/year
Only 5-year tax-saver FD
PPF 🏛️
Lock-in Period
15 years (partial from Yr 7)
As low as 7 days
FD 🏧
Liquidity
Low — partial only after 7 years
High — breakable anytime (penalty applies)
FD 🏧
Principal Safety
100% Government guaranteed
₹5L DICGC insured per bank
Both safe (PPF unlimited)
Maximum Investment
₹1.5L per year
No limit
FD 🏧
Maturity Tax
100% tax-free
Principal tax-free; interest taxed
PPF 🏛️
TDS
No TDS ever
TDS at 10% above ₹40K/yr interest
PPF 🏛️
Loan Against
PPF loan from Year 3–6 (up to 25%)
FD loan up to 90% of FD value
FD more flexible
Best Tenure
15–25 years
7 days to 10 years
Depends on goal
Frequently Asked Questions
PPF vs FD — FAQs
Is PPF interest tax-free even under the new tax regime?▼
Yes — PPF interest and maturity are exempt from tax under both old and new tax regimes. This is because the exemption is under Section 10(11) of the Income Tax Act, not a deduction. However, the 80C deduction for PPF contributions is only available under the old tax regime.
What happens to PPF after 15 years?▼
After the initial 15-year term, you can extend PPF in 5-year blocks (with or without fresh contributions). The extension keeps the tax-free status and earns current PPF rate. You can make one withdrawal per year during the extension period (up to 60% of balance at start of extension).
Can I invest more than ₹1.5L in PPF?▼
No — the maximum annual contribution to PPF is ₹1.5L per financial year. Any amount above ₹1.5L deposited into PPF will not earn interest and will be returned without any benefit. For amounts above ₹1.5L, consider Sukanya Samriddhi (for girl children), NPS, or debt mutual funds.
Which gives better returns — PPF or 5-year tax-saver FD?▼
Both give 80C deduction. However, PPF interest is tax-free while tax-saver FD interest is taxed at slab. At 30% slab, PPF at 7.1% gives ₹40.5L on ₹1.5L/yr for 15 years vs tax-saver FD at 7.25% giving ~₹35.8L post-tax on same investment. PPF wins for 20%+ slab.
Is TDS deducted on PPF interest?▼
No — PPF interest is completely exempt from income tax and no TDS is ever deducted. You also do not need to declare PPF interest in your ITR. This contrasts sharply with FD interest which is subject to TDS when interest exceeds ₹40,000/year (₹50,000 for senior citizens).