Mutual Fund vs PPF: Which is the better investment?

Mutual Fund vs PPF: Which is the better investment?


Today, investors have a wide range of options available, all of which will satisfy many of their investing requirements, such as high yields, low risk, portfolio liquidity maintenance, and tax avoidance benefits. Two other pension strategies are the Public Provident Fund (PPF) and the Mutual Fund (MFs). Now, let’s talk about which is a better investment Mutual Fund or PPF.

Investment Goal

PPF is a savings fund run by India’s government. The PPF aims to accumulate savings through the provision of fair interest rates and tax benefits.

Mutual Funds are issued by AMCs and, depending on their risk capability, are structured to cater to various forms of investor needs.

PPF Calculator

This financial instrument helps one to answer one’s Collective Provident Fund account questions. Some criteria should be met before determining the amount of maturity after a certain period. It keeps track of your capital’s growth. Many who already have a PPF savings account are aware of the monthly change in interest rates.

To measure the amount deposited, interest, etc., CRED uses a formula. This formula is given below.

F = P [({(1+i) ^n}-1)/i]

This formula represents the following variables:

I = Rate of interest

F = Maturity of PPF

N = Total number of years

P = Annual installments

PPF Return Calculator

PPF returns are estimated on an annual basis of roughly 8%. Through modifications in government policy, the rate of return increases. Visit to know more about PPF Maturity Calculator.

Purpose for Investment

As the minimum investment tenure is 15 years, a long-term investment, such as a brokerage business, is the main goal of the PPF.

Mutual Funds investment purpose is to raise and save savings that can be used to meet short-term goals (buying a car), medium-term goals (college tuition for children), or long-term goals (buying a house, retirement corpus creation).

Tax Advantage

Investment in PPF is tax-free, subject to a cap of Rs 1,50,000 per year, in addition to the exemption under Section 80C for all returns produced from PPF.

Mutual funds, depending on the investment plan, can be taxable. For non-tax exempt assets, long-term capital gains (LTCG) of over Rs 1 lakhs will be taxable, while under Section 80C, the ELSS fund is tax-free until a maximum of Rs 1,50,000.

Tenure Ownership

The PPF is set for 15 years of tenure. It is possible to renew PPF in sets 5 years after maturity. There is no set tenure for Mutual Funds. Investors can have an investment term that can be as brief as 6 months or before the investor decides to begin investing.


The PPF is planned as a long-term investment, but it is not liquid. However, in the form of a loan, the member can make use of 25 percent of the balance at the end of the third year. Withdrawal can be accessed from year 7 onwards. Mutual funds, in essence, are liquid. Within 1-2 days, the investor will withdraw the balance.


While the PPF is not a poor investment option, as you can check the PPF calculator and refer to the best investment, mutual funds are a simple winner against the PPF as provided by the above-mentioned points. It is advised, however, to work with a financial planner who can develop a goal-oriented investing plan based on your desires, financial priorities, risk profiling, and overall financial position.

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