Detailed comparison of PPF (7.1% tax-free) and Recurring Deposit (RD) (6.5 - 7.0%) to help you choose the right investment.
| Year | Deposit | Interest | Balance |
|---|
| Feature | PPF | RD |
|---|---|---|
| Returns | 7.1% p.a. (guaranteed) | 6.5 - 7.0% |
| Lock-in Period | 15 Years | Flexible (6 months to 10 years) |
| Tax on Returns | Fully Tax-Free (EEE) | Taxable as per income slab |
| Section 80C | Yes (up to ₹1.5 lakh) | No |
| Risk Level | Zero (Govt backed) | Low |
| Liquidity | Low (partial after 7 years) | Moderate (premature closure with penalty) |
| Best For | Long-term tax-free guaranteed growth | Regular monthly savings with guaranteed returns |
RD offers flexibility in tenure but returns are fully taxable and no 80C benefit. PPF is far superior for long-term tax-free wealth building.
See how much your PPF investment can grow over different tenures:
| Yearly Deposit | Total Deposited | Interest Earned | Maturity Value |
|---|---|---|---|
| ₹500/yr | ₹7,500 | ₹6,063 | ₹13,563 |
| ₹1,000/yr | ₹15,000 | ₹12,121 | ₹27,121 |
| ₹2,000/yr | ₹30,000 | ₹24,241 | ₹54,241 |
| ₹3,000/yr | ₹45,000 | ₹36,363 | ₹81,363 |
| ₹5,000/yr | ₹75,000 | ₹60,606 | ₹1,35,606 |
| ₹10,000/yr | ₹1,50,000 | ₹1,21,215 | ₹2,71,215 |
| ₹12,000/yr | ₹1,80,000 | ₹1,45,455 | ₹3,25,455 |
| ₹15,000/yr | ₹2,25,000 | ₹1,81,823 | ₹4,06,823 |
| ₹20,000/yr | ₹3,00,000 | ₹2,42,428 | ₹5,42,428 |
| ₹25,000/yr | ₹3,75,000 | ₹3,03,036 | ₹6,78,036 |
| ₹30,000/yr | ₹4,50,000 | ₹3,63,638 | ₹8,13,638 |
| ₹40,000/yr | ₹6,00,000 | ₹4,84,858 | ₹10,84,858 |
| ₹50,000/yr | ₹7,50,000 | ₹6,06,070 | ₹13,56,070 |
| ₹60,000/yr | ₹9,00,000 | ₹7,27,283 | ₹16,27,283 |
| ₹70,000/yr | ₹10,50,000 | ₹8,48,497 | ₹18,98,497 |
| ₹80,000/yr | ₹12,00,000 | ₹9,69,708 | ₹21,69,708 |
| ₹90,000/yr | ₹13,50,000 | ₹10,90,925 | ₹24,40,925 |
| ₹1,00,000/yr | ₹15,00,000 | ₹12,12,139 | ₹27,12,139 |
| ₹1,20,000/yr | ₹18,00,000 | ₹14,54,569 | ₹32,54,569 |
| ₹1,50,000/yr | ₹22,50,000 | ₹18,18,208 | ₹40,68,208 |
PPF offers 7.1% guaranteed tax-free returns with a 15-year lock-in, while RD offers 6.5 - 7.0% returns with Flexible (6 months to 10 years) lock-in. PPF has EEE tax status making it fully tax-free, whereas RD: Taxable as per income slab.
RD offers flexibility in tenure but returns are fully taxable and no 80C benefit. PPF is far superior for long-term tax-free wealth building.
Yes, you can invest in both PPF and RD. However, the combined Section 80C deduction limit is ₹1,50,000 per year. Many investors diversify across both instruments to balance risk and returns.
PPF is backed by the Government of India and carries zero risk with guaranteed returns. RD has low risk. If capital preservation is your priority, PPF is the safer choice.
PPF has EEE status — deposits, interest, and maturity are all tax-free. RD Section 80C: No. Tax on returns: Taxable as per income slab.