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.
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 Apr–Jun 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.