PPF offers safe, tax-free returns; FDs offer safety and liquidity but taxable interest; equity SIPs offer the highest expected growth with market risk. Investing ₹1.5 lakh a year for 15 years grows to roughly ₹40,68,209 in PPF (7.1%), ₹33,69,944 in FDs (7% taxed at 30%) and ₹63,07,200 in an equity SIP (12% assumed).
Comparison at a glance
| PPF | Fixed deposit | Equity mutual fund SIP | |
|---|---|---|---|
| Return (assumed) | 7.1% (govt-set, quarterly) | 6.5–7.5% | 10–14% long-run, not guaranteed |
| Risk | Sovereign guarantee | Very low (DICGC cover ₹5 lakh/bank) | Market risk |
| Tax on returns | Tax-free (EEE) | Taxed at your slab | LTCG above annual exemption |
| Lock-in | 15 years (partial withdrawals from year 7) | Flexible, penalty on early exit | None (ELSS: 3 years) |
| ₹1.5L/yr for 15 years | ₹40,68,209 | ₹33,69,944 | ₹63,07,200 |
How to combine them
Most planners suggest using each for what it does best: FDs for your emergency fund and short-term goals, PPF for a guaranteed, tax-free long-term base, and equity SIPs for long-term wealth creation such as retirement and children’s education. Your mix should depend on your goals, horizon and comfort with volatility.
Run exact figures in the ppf calculator, fd calculator and sip calculator. Rates change quarterly; this is not investment advice.