PPF vs Mutual Fund Calculator
The same yearly amount in PPF and in an equity fund — maturity values side by side, after tax.
- Invested
- PPF
- Mutual fund (pre-tax)
Both sides invest ₹1.50L at the start of every year for 15 years. PPF compounds at 7.1% and is exempt at every stage; the fund compounds at an assumed 12% and its gain is taxed once at redemption — 12.5% long-term capital gains above the ₹1.25 lakh annual exemption, as for equity funds. A 15-year PPF account can be extended in 5-year blocks, which is why the horizon runs in fives. The PPF rate is revised quarterly by the government.
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Independent · No commissions · No fund-house data — how the numbers are computed
How it works
The ₹1.5 lakh a year that fits in PPF is the same ₹1.5 lakh that could go into an equity fund, and this calculator puts the two side by side for the same yearly contribution. PPF compounds at its notified rate (7.1% at the default) and is exempt at every stage — contribution, interest and maturity. The fund compounds at whatever return you assume and is taxed once, on redemption: 12.5% on long-term gains above ₹1.25 lakh in the year, the equity-fund rule. The comparison is therefore between PPF's maturity value and the fund's post-tax value.
The horizon runs in five-year steps from 15 because that is how PPF works: a 15-year term, extendable in blocks of five. Over 15 years at the defaults the fund comes out ahead even after tax; the gap is the return difference compounding, and it widens sharply with time. Move the fund's return down toward 9–10% and the two converge, which is the honest way to read the page — the result is a statement about the return assumption, not a verdict on either product.
What the numbers leave out matters. PPF's return is contractual and its rate is reset quarterly by the government, historically between 7% and 8.8%; the fund's is a guess about markets, and a 15-year window can contain years of negative returns. PPF's balance also cannot be touched freely before year 7, while fund units are redeemable in a day. Both sides qualify for the §80C deduction under the old regime when the fund is an ELSS.
FV = A × ((1 + r)^n − 1) / r × (1 + r); Fund_post-tax = FV_fund − 12.5% × max(0, gain − ₹1.25 L)A is the yearly amount deposited at the start of each year, r the annual rate, n the years. PPF's FV is the final answer; the fund's is reduced by long-term capital-gains tax on the gain above the exemption.
Frequently asked questions
Is the mutual fund side's tax computed correctly for a SIP?
It is a simplification. The calculator treats the whole fund gain as long-term and redeemed in one year, applying 12.5% above a single ₹1.25 lakh exemption. A real redemption spread across financial years would use the exemption more than once and pay less; units bought within a year of redemption would be short-term and taxed at 20%. For a 15-year comparison the simplification is conservative against the fund.
Why is PPF capped at ₹1.5 lakh a year?
Because that is the statutory maximum contribution to a PPF account in a financial year, and the calculator compares equal amounts. A mutual fund has no such cap, so anyone able to invest more than ₹1.5 lakh a year is really comparing PPF plus a fund against a larger fund investment, which this page does not model.
Does PPF's rate stay at 7.1% for 15 years?
No. The government notifies the PPF rate every quarter and it applies to the whole balance, not just new deposits. It was 7.1% from April 2020 through the Oct–Dec 2026 quarter; in the previous two decades it ranged from 7% to 8.8%. The slider runs 5–10% so the comparison can be re-run at a different assumption.
Which is safer?
PPF: the return is fixed by notification, the balance is sovereign-backed and cannot fall. An equity fund's value moves with the market and can be below the amount invested for years at a stretch. The calculator shows the expected outcome at an assumed rate; it does not show the range of outcomes, which for the fund is wide and for PPF is essentially zero.
Go further
The PPF side on its own, with the year-by-year balance.
The same guaranteed-vs-market trade-off, in plain terms.
The LTCG rules this page applies to the fund side.
The fund that shares PPF's §80C deduction.
What the PPF side of this comparison actually offers beyond the headline rate.