Inputs
For resident individuals. Years follow PPF: 15, or 20, 25 and so on with its five-year extensions. The PPF rate is held as it is today, though the government reviews it every quarter.
Filled in for you15 years, fund returning 10%, PPF at 7.1%, inflation
Verdict
The SIP comes out ₹5.88 lakh ahead after 15 years
The SIP leaves you ₹15.62 lakh in today's rupees.
This answer uses an example amount, RD rate and tax rate. Put in yours to get your own answer.
- Equity SIP₹37.44 lakh
After ₹2.72 lakh tax: ₹1,332 on short-term gains (the last year's instalments) and ₹2.71 lakh on long-term gains above ₹1,25,000
- PPF₹31.56 lakh
Tax-free
- Recurring deposit₹26.20 lakh
After ₹5.09 lakh tax on the interest, at your rate
Equity returns are not guaranteed. A fund can fall in value, and can stay below what you put in for years. The return used here is an assumption, not a forecast; try lower ones to see how the answer changes.
How equity gains are taxed
- Held 12 months or less: short-term, taxed at 20% of the gain.
- Held longer: long-term, taxed at 12.5% of the gains above ₹1,25,000 in a year.
- Plus 4% cess on the tax. PPF interest is tax-free; FD and RD interest is taxed every year at your slab rate.
- The amounts above already have this tax taken off.
The SIP's value moves with the market; PPF and the RD do not.
Saved scenarios
What would flip the answer
Each line changes one input and holds the rest.
None of the inputs we test flips the answer within a realistic range.
Not modelled: weigh these yourself
Show the workingEvery step of the sum, with the numbers above.
Show year by yearWhat each would leave you at the end of each year, and the SIP at other fund returns.
| Year | Equity SIP | PPF | Recurring deposit |
|---|---|---|---|
| 1 | ₹1.25 lakh | ₹1.25 lakh | ₹1.23 lakh |
| 2 | ₹2.64 lakh | ₹2.58 lakh | ₹2.52 lakh |
| 3 | ₹4.17 lakh | ₹4.01 lakh | ₹3.87 lakh |
| 4 | ₹5.85 lakh | ₹5.54 lakh | ₹5.29 lakh |
| 5 | ₹7.65 lakh | ₹7.18 lakh | ₹6.78 lakh |
| 6 | ₹9.58 lakh | ₹8.94 lakh | ₹8.34 lakh |
| 7 | ₹11.68 lakh | ₹10.82 lakh | ₹9.97 lakh |
| 8 | ₹13.98 lakh | ₹12.83 lakh | ₹11.68 lakh |
| 9 | ₹16.50 lakh | ₹14.99 lakh | ₹13.47 lakh |
| 10 | ₹19.24 lakh | ₹17.30 lakh | ₹15.35 lakh |
| 11 | ₹22.25 lakh | ₹19.77 lakh | ₹17.32 lakh |
| 12 | ₹25.55 lakh | ₹22.42 lakh | ₹19.39 lakh |
| 13 | ₹29.15 lakh | ₹25.26 lakh | ₹21.55 lakh |
| 14 | ₹33.11 lakh | ₹28.30 lakh | ₹23.82 lakh |
| 15 | ₹37.44 lakh | ₹31.56 lakh | ₹26.20 lakh |
PPF is locked until year 15; its balance is shown for comparison. The highest is in brass.
If the fund does better or worse
How this works
The tool puts the same amount in each, at the start of every month, for the same years. The SIP grows at the fund return you expect and is sold at the end, with capital-gains tax: instalments from the last year are short-term, the rest long-term above the yearly exemption. PPF earns its rate on the balance each month, credited once a year, and is tax-free. The recurring deposit grows at its rate after your tax on the interest each year.
Assumptions and sources
| Assumption | Value | Source | As of |
|---|---|---|---|
| PPF interest rate | 7.1% | National Savings Institute (Ministry of Finance), Public Provident Fund Account page and PPF Scheme 2019 rules: 7.1% a year on deposits and balances from 1 April 2020; ₹500 minimum and ₹1,50,000 maximum deposit in a financial year; matures after fifteen years; interest calculated monthly on the lowest balance between the close of the fifth day and the end of the month and credited at the end of each year; interest free from income tax under Section 10. Rate unchanged for October-December 2026 (Department of Economic Affairs announcement, 30 September 2026, as reported by Business Standard). | 2026-10-21 |
| PPF deposit a year | ₹500 – ₹1,50,000 | National Savings Institute (Ministry of Finance), Public Provident Fund Account page and PPF Scheme 2019 rules: 7.1% a year on deposits and balances from 1 April 2020; ₹500 minimum and ₹1,50,000 maximum deposit in a financial year; matures after fifteen years; interest calculated monthly on the lowest balance between the close of the fifth day and the end of the month and credited at the end of each year; interest free from income tax under Section 10. Rate unchanged for October-December 2026 (Department of Economic Affairs announcement, 30 September 2026, as reported by Business Standard). | 2026-10-21 |
| Capital-gains tax on equity, short / long term | 20% / 12.5% | PIB, 'Union Budget 2024-25: Key Tax Reforms and Relief Measures' (July 2024): long-term gains on all financial and non-financial assets 12.5% without indexation; exemption on equity gains raised to ₹1.25 lakh a year from FY 2024-25; short-term gains on specified financial assets 20%. ₹1,25,000 exemption also in CBDT ITR-1 validation rules AY 2026-27, rule 217. Unchanged for tax year 2026-27 (PIB New India Samachar, February 2026, p. 25). Holding periods (listed securities one year, all other assets two years): CBDT FAQs on the new capital-gains regime, PIB release PRID 2036604 (July 2024); units held 12 months or less are treated as short-term. | 2026-10-21 |
| Yearly exemption on equity gains | ₹1,25,000 | PIB, 'Union Budget 2024-25: Key Tax Reforms and Relief Measures' (July 2024): long-term gains on all financial and non-financial assets 12.5% without indexation; exemption on equity gains raised to ₹1.25 lakh a year from FY 2024-25; short-term gains on specified financial assets 20%. ₹1,25,000 exemption also in CBDT ITR-1 validation rules AY 2026-27, rule 217. Unchanged for tax year 2026-27 (PIB New India Samachar, February 2026, p. 25). Holding periods (listed securities one year, all other assets two years): CBDT FAQs on the new capital-gains regime, PIB release PRID 2036604 (July 2024); units held 12 months or less are treated as short-term. | 2026-10-21 |
| Recurring deposit rate | —Not verified | typical bank FD rate, cite bank or RBI data | 2026-10-19 |
| Fund return before tax (scenarios) | 7% / 10% / 12% | CapitalVerdict default assumption from project spec; user-editable, not a forecast | 2026-10-19 |
Questions
Why does PPF often beat the recurring deposit?
PPF interest is tax-free, while RD interest is taxed every year at your rate. At similar rates, the tax makes the RD grow more slowly.
Why is part of the SIP taxed as short-term?
Each instalment is its own purchase. When you sell everything at the end, instalments held a year or less count as short-term and are taxed at a higher rate; the rest are long-term, taxed above the yearly exemption.
What does the tool leave out?
The PPF deduction under the old tax regime, changes to the PPF rate, fund expense ratios beyond what the return you enter already reflects, and surcharge on high incomes. If any of these matter for you, adjust the inputs.