PPF vs FD: Where will you make a lot of money in 10-15 years? Invest only after considering this 'secret math' of interest and taxes..
PPF vs. FD: Nowadays, everyone is wondering where to invest their hard-earned money so they don't fear loss and can accumulate a substantial corpus after 10-15 years. For a child's education, marriage, or retirement, most people consider only two options: PPF and FD. Both are government-guaranteed and are completely safe options. But which one is more beneficial? How much interest will you earn? How much tax will you save? Can you withdraw your money? What is the lock-in period? Today, we'll explain the entire comparison clearly so you can decide in 5 minutes whether your money should go into PPF or FD.
Which one wins in terms of interest rates? The complete calculation for the current quarter
October-December 2025:
Interest on PPF: 7.1% (set by the government every year)
Interest on bank FDs: 6.5% to 7.50% (SBI 7%, Post Office 7.5%, some smaller banks up to 7.75%)
From the perspective of an average citizen, FDs seem to be the best option, but the real game is compounding and taxation – understand further.
Tax game: This is where the tables turn.
PPF: EEE category (Exempt-Exempt-Exempt)
-Tax exemption on deposits (up to 1.5 lakh under 80C)
-Interest earned tax-free
-The entire maturity amount is tax-free
FD: TDS is deducted only on the interest every year
-If you are in the 30% tax bracket, 2.1% of the 7% interest goes directly to the government
-In reality, you only get 4.9%
Result: PPF always outperforms FDs in the long run.
How much will you earn after 10-15 years? Check out the real numbers.
Investing ₹10,000 per month (total ₹18 lakh deposit over 15 years):
Scheme Interest Rate Total Amount in Hand After Tax After 15 Years
PPF 7.1% Approximately ₹34.5 lakh Total ₹34.5 lakh
Bank FD 7.5% Approximately ₹33.8 lakh Approximately ₹27-₹29 lakh
Post Office FD 7.5% Approximately ₹33.8 lakh Tax exemption after 5 years, still around ₹31 lakh
Lock-in and Liquidity: How much exemption is there?
PPF: Full lock-in period of 15 years
- Partial withdrawals are possible from the sixth year
- Loans are also available
- Emergency account closure is also available (with some penalties)
FD: Withdrawals are subject to a 0.5-1% penalty if made for 5, 7, or 10 years.
- Tax-saving FDs are not withdrawable for 5 years.
So, PPF is more flexible for long-term goals.
Which FDs should you choose, which PPF?
People who choose PPF
Those aged 25-45 years
Those who want to pay the 1.5 lakh limit under Section 80C every year
Those who want a large sum of money tax-free after 15 years
Those who are planning for retirement
Those who choose FD
Senior citizens (0.5% extra interest)
Those who need money within 5-7 years
Those who need interest every month (Monthly Income Scheme)
Those who have already paid 1.5 lakh under Section 80C
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