Fixed deposits (FDs) and the Public Provident Fund (PPF) are both popular risk-free investment options. FDs are offered by banks and provide guaranteed returns over a chosen tenure. PPF is a government-backed savings scheme with a 15-year term and tax benefits. The table contrasts FDs and PPF.
| Factor | Fixed deposit (FD) | Public Provident Fund (PPF) |
|---|---|---|
| Tenure | 7 days–10 years | 15 years (with partial withdrawal allowed after year 7) |
| Interest rate | Fixed at booking; varies by bank | Notified quarterly by the government (7.1% as of 2025) |
| Tax benefits | Interest fully taxable; Section 80C deduction only for tax-saving FD up to ₹1.5 lakh | Interest and maturity proceeds tax-free under Section 80C |
| Liquidity | Premature withdrawal allowed with penalty | Partial withdrawals/loans available but restricted |
| Suitability | Ideal for short-term to medium-term goals | Ideal for long-term wealth creation and retirement savings |
Choose FDs when you want flexibility and fixed returns, and choose PPF when you have a long-term horizon and want tax-free returns.
