Key Takeaways
- FDs offer flexible terms; PPF is a long-tenure scheme.
- PPF interest compounds annually and is set by the government.
- FDs are more liquid; PPF has withdrawal restrictions.
- PPF rules and rates are statutory and change — verify before relying on them.
On this page
Different by design
A fixed deposit is a bank product you can open for a wide range of terms. The Public Provident Fund (PPF) is a government-backed long-term savings scheme with a fixed long tenure and annual contribution limits set by rule.
Side by side
| Factor | Fixed Deposit | PPF |
|---|---|---|
| Term | Flexible (days to years) | Long, fixed tenure |
| Rate set by | The bank | The government (statutory) |
| Compounding | Often quarterly | Annual |
| Liquidity | Higher (with penalty) | Restricted, with rules |
Verify the rules
PPF interest rates, contribution limits, and withdrawal rules are statutory and are revised from time to time. We deliberately do not hardcode them. Check the National Savings Institute and other primary sources for current figures before making decisions. Use the FD calculator and PPF calculator with your own rate assumptions to compare illustrative outcomes.
Sources
We reference primary and official sources. Rate- and rule-dependent details must be verified against the latest official information.
Related Calculators
Related Guides
How Is Interest on FDs and RDs Taxed?
Interest earned on fixed deposits and recurring deposits is fully taxable as 'income from other sources' at your slab rate. Banks may deduct TDS above thresholds, but you owe tax on the interest either way. The post-tax return is what to compare against alternatives.
retirementPPF vs FD
Both PPF and FDs prioritise stability, but PPF is a long-tenure, government-set scheme with annual compounding, while FDs are flexible bank deposits with bank-set rates.
bankingWhat Is a Fixed Deposit?
A fixed deposit is a deposit placed with a bank for a fixed term at an interest rate agreed at the time of booking, offering predictable returns and high capital stability.
retirementWhat Is the Public Provident Fund (PPF)?
PPF is a long-term, government-backed savings scheme where you contribute each year and earn annually compounded interest at a rate set by the government. Its rules are statutory and change over time.