PPF vs FD Calculator

PPF Maturity Formula:

\[ \text{PPF Maturity} = P \times \left(\frac{(1 + i)^n - 1}{i}\right) \times (1 + i) \]

FD Maturity Formula:

\[ \text{FD Maturity} = P \times (1 + r)^n \]

Annual Deposit (P):

PPF Interest Rate (i):

FD Interest Rate (r):

Investment Period (n):

years

PPF Maturity ($):

FD Maturity ($):

Difference ($):

Definition: This calculator compares the maturity amounts of Public Provident Fund (PPF) and Fixed Deposit (FD) investments.

Purpose: It helps investors understand which investment option would yield better returns over a given period.

The calculator uses two formulas:

\[ \text{PPF Maturity} = P \times \left(\frac{(1 + i)^n - 1}{i}\right) \times (1 + i) \]

\[ \text{FD Maturity} = P \times (1 + r)^n \]

Where:

Explanation: PPF calculation accounts for annual deposits with compounding, while FD assumes a lump sum investment with compounding.

PPF: Tax benefits, 15-year lock-in, annual deposits, compounding quarterly but credited annually.

FD: No tax benefits, flexible tenure, lump sum investment, compounding as per bank terms.

Tips: Enter annual deposit amount, PPF interest rate (default 7.1%), FD interest rate (default 6.5%), and investment period (default 15 years).

Q1: Why does PPF often outperform FD?
A: PPF benefits from tax-free compounding and typically offers higher interest rates than FDs.

Q2: Can I change the deposit frequency?
A: This calculator assumes annual PPF deposits. For monthly deposits, divide annual amount by 12.

Q3: Are taxes considered in this calculation?
A: No, this shows gross returns. FD interest is taxable while PPF is tax-free.

Q4: What's the minimum PPF investment period?
A: PPF has a 15-year lock-in, extendable in 5-year blocks.

Q5: Why does FD calculation assume lump sum?
A: For fair comparison, FD is calculated as if you invested the total PPF contributions upfront.