PPF vs FD Calculator

Investment

Put the same yearly amount into a tax-free PPF and a taxable fixed deposit and see how PPF’s EEE tax status quietly widens the maturity gap over the years.

Free · No sign-up · Private6 min readUpdated 27 July 2026

In short: For the same yearly deposit, PPF gives a fully tax-free (EEE) ~7.1% return with a sovereign guarantee, while an FD’s ~7% interest is taxed at your slab — so a 30%-slab investor keeps only about 4.9% post-tax. Over a 15-year term PPF almost always ends up ahead, but the FD offers flexible tenures and no ₹1.5 lakh cap.

Your inputs

Results

PPF maturity

₹40,68,209

Tax-free (EEE)

FD maturity

₹33,69,944

After tax on interest

Difference

₹6,98,266

PPF minus FD

Total deposited

₹22,50,000

PPF vs FD maturity over time

How the same yearly deposit grows in a tax-free PPF versus a taxable FD (post-tax).

Year-wise comparison

Year-wise comparison
Year	PPF value	FD value (post-tax)
1	₹1,60,650	₹1,57,350
2	₹3,32,706	₹3,22,410
3	₹5,16,978	₹4,95,558
4	₹7,14,334	₹6,77,191
5	₹9,25,701	₹8,67,723
6	₹11,52,076	₹10,67,591
7	₹13,94,524	₹12,77,253
8	₹16,54,185	₹14,97,189
9	₹19,32,282	₹17,27,901
10	₹22,30,124	₹19,69,918

Both modelled as yearly deposits compounding annually; the FD compounds at its post-tax rate.

Formula

PPF = annual annuity at r; FD = annual annuity at r × (1 − tax slab)

r: Stated annual interest rate for each instrument
PPF: Yearly deposit compounded annually at the tax-free PPF rate
FD: Yearly deposit compounded annually at the FD’s post-tax rate
tax slab: Your marginal income-tax rate applied to FD interest
t: Investment horizon in years

Step-by-step calculation

Worked with the default values.

1
FD post-tax rate
7% × (1 − 30%)
= 4.90%
2
PPF maturity (tax-free)
₹1,50,000/yr at 7.1% for 15 yrs
= ₹40,68,209
3
FD maturity (post-tax)
₹1,50,000/yr at 4.90% for 15 yrs
= ₹33,69,944
4
Difference
PPF maturity − FD maturity
= ₹6,98,266

How it works

You choose a yearly deposit (capped at ₹1.5 lakh for PPF) and the calculator puts the same amount into both a PPF and an FD each year.
PPF compounds annually at the government-set rate and every rupee of interest and maturity is tax-free under the EEE regime.
The FD is modelled at its post-tax rate — rate × (1 − your slab) — because FD interest is added to your income and taxed each year, so the comparison isolates the tax drag.

Examples

₹1,50,000/year for 15 years (PPF 7.1%, FD 7%, 30% slab)

PPF grows to about ₹40.68 lakh; the FD, taxed down to ~4.9% post-tax, reaches roughly ₹33.7 lakh — a gap of about ₹7 lakh.

₹1,00,000/year for 10 years (PPF 7.1%, FD 7%, 20% slab)

PPF reaches about ₹15 lakh versus roughly ₹14 lakh in the FD, as the smaller tax slab narrows but does not close the gap.

Understanding the PPF vs FD Calculator

PPF versus FD: the tax-free difference

At first glance a 7.1% PPF and a 7% fixed deposit look almost identical. The gap only shows up when tax enters the picture. PPF enjoys EEE (exempt-exempt-exempt) status: the deposit earns an 80C deduction, the interest is tax-free, and the maturity amount is tax-free too. An FD is the opposite on the interest side — every rupee of interest is added to your income and taxed at your slab rate, with banks deducting TDS once interest crosses ₹40,000 a year. This calculator puts the same yearly deposit into both and grows the FD at its post-tax rate, so you compare what you actually keep rather than a headline number.

Why PPF pulls ahead for higher earners

For a 30%-slab investor, a 7% FD delivers only about 4.9% after tax, while the 7.1% PPF return is kept in full. Compounded over a 15-year term, that difference widens into a meaningful gap. To match a tax-free 7.1% PPF, a 30%-slab investor would need an FD paying roughly 10.1% pre-tax — a rate almost no bank offers. The higher your slab, the more decisively PPF wins.

Where the FD still makes sense

Liquidity — FDs come in tenures from days to years and can be broken early; PPF locks money for 15 years.
No cap — PPF is limited to ₹1.5 lakh a year, so large surpluses have to go into FDs.
Simplicity — FDs are quick to open, ladder and pledge as collateral.
Zero-tax savers — if your income is below the taxable limit, the FD’s tax drag disappears and the two draw level.

How to use both together

The smart move is rarely either-or. Fill your ₹1.5 lakh PPF quota first for guaranteed, tax-free, long-horizon compounding — it is the strongest debt anchor available to Indian investors. Then use FDs for shorter goals, an emergency buffer, and any money beyond the PPF cap. That way you capture PPF’s tax advantage where it counts and keep the flexibility of FDs where you need liquidity, spreading your safe money across two complementary buckets rather than forcing it all into one.

Pros

PPF is fully tax-free (EEE) — its stated rate is also its net rate.
PPF carries a direct sovereign guarantee, so returns and capital are effectively risk-free.
PPF contributions earn an 80C deduction up to ₹1.5 lakh a year.
FDs offer flexible tenures and easy premature access when you need liquidity.
FDs have no investment cap, so large surpluses can be deployed fully.

Cons

PPF has a rigid 15-year lock-in and a ₹1.5 lakh annual cap.
FD interest is taxed at your slab every year, dragging down its net return.
FDs breaking early attract a penalty and a lower effective rate.
Both offer only fixed, modest returns that may barely beat inflation after tax.

Tips

1If you are in the 20% or 30% slab, prioritise filling your ₹1.5 lakh PPF quota before booking new FDs.
2Use FDs for short-term goals and emergency funds where PPF’s lock-in would trap your money.
3Deposit your PPF amount before 5 April each year to earn a full year of tax-free interest.
4Compare your FD’s post-tax rate, not its headline rate, against PPF before deciding.
5Submit Form 15G/15H on FDs if your income is below the taxable limit to stop unnecessary TDS.

Frequently asked questions

Everything you need to know about the PPF vs FD Calculator.

Is PPF really better than an FD?

For a taxpayer in a higher slab, usually yes. PPF is fully tax-free (EEE), so its stated rate is also its net rate, whereas an FD’s interest is taxed every year. A 7.1% tax-free PPF beats a 7% FD that a 30%-slab investor only keeps ~4.9% of after tax.

How is the FD taxed in this comparison?

FD interest is added to your income and taxed at your slab rate. To keep the comparison fair, the calculator grows the FD at its post-tax rate — the stated rate multiplied by (1 − your slab) — rather than showing a headline figure you never actually keep.

Why is PPF’s effective yield higher than its stated rate?

Because it is tax-free. To match a 7.1% tax-free PPF return, a 30%-slab investor would need an FD paying about 10.1% pre-tax. Very few FDs offer that, which is why PPF is such a strong debt anchor for higher earners.

What is the ₹1.5 lakh PPF limit?

You can deposit at most ₹1.5 lakh into PPF per financial year, and it also qualifies for an 80C deduction. Anything above that earns no interest. FDs have no such cap, so large sums can only be fully deployed in FDs.

Is FD interest always taxed?

Yes, FD interest is taxable at your slab regardless of tenure. Banks deduct 10% TDS once interest crosses ₹40,000 a year (₹50,000 for senior citizens). A 5-year tax-saving FD gets an 80C deduction on the deposit, but its interest is still taxed.

Which is safer, PPF or FD?

Both are very safe. PPF is backed by a direct sovereign guarantee, so it is effectively risk-free. Bank FDs are insured by the DICGC up to ₹5 lakh per depositor per bank, so amounts within that limit are equally protected.

Which is more liquid?

The FD wins on liquidity. It comes in tenures from days to years and can be broken early for a small penalty. PPF has a 15-year lock-in, with only limited partial withdrawals allowed from the 7th year, so it is unsuitable for money you may need soon.

Can senior citizens change the maths?

Yes. Senior citizens often get 0.25–0.75% extra on FDs and a higher ₹50,000 TDS threshold, which narrows the gap. Even so, once slab-rate tax is applied, a tax-free PPF usually stays ahead for those still in a taxable bracket.

Should I put emergency money in PPF?

No. PPF’s long lock-in makes it a poor home for an emergency fund. Keep emergency money in a short FD, sweep-in FD or liquid fund, and use PPF only for money you can commit for the full 15-year term.

Can I use both PPF and FD together?

Absolutely, and most investors should. Fill your ₹1.5 lakh PPF quota for tax-free, long-term compounding, and use FDs for shorter goals, emergency buffers and any surplus beyond the PPF cap. They complement rather than compete.

Methodology & sources

How the PPF vs FD Calculator is calculated, and where the underlying rules come from.

How we calculate it

Every result is produced by a single, shared and tested financial-formula library used across the whole site — so the maths is consistent from one calculator to the next. Figures are estimates based on the inputs you enter and standard assumptions (such as regular compounding and constant rates); real-world outcomes vary with taxes, fees and changing rates. All calculations run in your browser — nothing you type is stored or sent to a server.

Sources & references

Editorial policy & disclaimer. FinCalcHub provides free educational tools and estimates — not personalised financial, tax or investment advice. Verify important decisions with a qualified professional. Read our editorial approach, disclaimer and privacy policy.

Reviewed by Dhirendra Bisht, Founder & Lead Engineer, FinCalcHub — last reviewed 27 July 2026.