Comparison between PPF (Public Provident Fund) and Mutual Funds across key factors:
PPF vs Mutual Funds – Detailed Comparison
| Feature | PPF (Public Provident Fund) | Mutual Funds |
| Type of Investment | Government-backed debt scheme | Market-linked (Equity, Debt, Hybrid, etc.) |
| Returns | Fixed (around 7%–8% p.a., set by Govt. quarterly) | Market-dependent (can be 4%–15%+ p.a.) |
| Risk Level | Very Low (Govt guaranteed) | Varies (Low to High, based on fund type) |
| Lock-in Period | 15 years (can be extended in 5-year blocks) | Varies: ELSS – 3 yrs, others – no lock-in |
| Liquidity | Partial withdrawal allowed after 5 years | High (Redemption within 1–3 working days) |
| Tax Benefits on Investment | Eligible under Sec 80C (up to ₹1.5 lakh) | ELSS only eligible under Sec 80C (₹1.5 lakh) |
| Tax on Returns | Completely Tax-Free (Exempt-Exempt-Exempt) | Taxable (as per capital gains rules) |
| Minimum Investment | ₹500 per year | As low as ₹100–₹500 per month (SIP) |
| Maximum Investment | ₹1.5 lakh per financial year | No limit |
| Who Should Invest? | Conservative, long-term savers | All types of investors (based on risk appetite) |
Summary:
- PPF is ideal for risk-averse, long-term savers looking for safe, tax-free returns.
- Mutual Funds are suitable for wealth creation, with higher return potential but also higher risk.
