What is the liquidity difference between PPF and Mutual Funds?

PPF locks your capital for 15 financial years, with only restricted partial loans or withdrawals allowed after Year 7. Open-ended mutual funds provide full liquidity within 1 to 2 business days without maturity lock-in penalties (except ELSS funds which have a 3-year lock-in).

PPF & Bank RD vs. Equity SIP

Break the 15-year statutory lock-in illusion.

Benchmark 7.1% EEE debt safety against systematic equity compounding to reveal the real opportunity cost over long horizons.

Monthly Investment Amount

₹

₹1,000₹1,00,000

Note: PPF has a statutory maximum cap of ₹1.50 Lakhs per financial year (₹12,500/month).

Investment Horizon (PPF Standard = 15 Yrs)

Yrs

5 Yrs30 Yrs

Public Provident Fund (PPF) Rate

6.5%8.5%

Tax-free (Exempt-Exempt-Exempt).

Equity Mutual Fund Expected CAGR

9%16%

15-Year Head-to-Head Comparison

Bank RD (Post-Tax)₹34,07,027Slab taxed

PPF (Tax-Free)₹40,68,2097.1% locked

Equity SIP (Post-Tax)₹58,15,675After 12.5% tax

Net Wealth Surplus in Equity SIP

+₹17,47,466

₹12,500/month (Maximum Legal PPF Limit) over 15 Years

Comparison across Bank RD, PPF, and Equity SIP (Total Invested: ₹22,50,000).

Instrument	Total Invested	Maturity Value	Wealth Gained
Bank Recurring Deposit (RD)	₹22.50 Lakhs	₹31.98 Lakhs (Post-Tax)	+₹9.48 Lakhs
Public Provident Fund (PPF)	₹22.50 Lakhs	₹40.68 Lakhs (Tax-Free)	+₹18.18 Lakhs
Equity Mutual Fund SIP	₹22.50 Lakhs	₹60.82 Lakhs (Post-Tax)	+₹38.32 Lakhs

Frequently Asked Questions & Expert Guidance

Yes. Many prudent investors follow a core-and-satellite approach: utilizing PPF for debt asset allocation and Section 80C tax deductions (up to ₹1.5 Lakhs), while channeling all incremental surplus into equity mutual fund SIPs for long-term compounding.