Fixed Deposit vs Public Provident Fund

Fixed Deposits (FDs) and Public Provident Funds (PPF) are secure, low-risk fixed-income investment options in India, designed to meet different financial goals and needs.
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FD vs PPF
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4 mins
25-February-2026

Choosing the right savings option is key to building financial stability. While both Fixed Deposits (FDs) and Public Provident Fund (PPF) are low-risk and secure, they serve different purposes. FDs are better suited for short- to medium-term goals with guaranteed returns, whereas PPF is designed for long-term savings with tax benefits.

Bajaj Finance FD offers up to 7.30% p.a. returns with flexible tenures, helping you achieve your financial goals faster. Check eligibility to invest!

What is Fixed Deposit?

A Fixed Deposit (FD) is a secure investment option offered by banks and financial institutions. You deposit a lump sum for a fixed tenure and earn interest at a predetermined rate. Premature withdrawals are possible but may attract a small penalty.

Key features of Bajaj Finance FD:

  • Interest rate: Up to 7.30% p.a.
  • Minimum deposit: Rs. 15,000
  • Tenure: 12 to 60 months
  • Senior citizens get up to 0.35% higher returns
  • End-to-end digital process for quick booking

With Bajaj Finance FD, you can start small and grow your money steadily—perfect for both first-time savers and experienced investors. Open FD account.

Also Read: Types of Fixed Deposit

Fixed Deposit

  1. Trusted by over 5 lakh customers
  2. Fixed Deposits worth more than Rs. 50,000 crore booked
  3. Rated CRISIL AAA/STABLE and [ICRA]AAA(STABLE)
  4. Up to 0.35% p.a. extra interest offered for senior citizens
  5. Flexible interest payout options available - Monthly, Quarterly, Half-yearly, Annually or at Maturity

By proceeding, you agree to our Terms and Conditions

What is Public Provident Fund (PPF)?

The Public Provident Fund (PPF) is a government-backed savings scheme with a lock-in of 15 years. It offers tax benefits under Section 80C, and the interest earned is tax-free. However, liquidity is limited, as withdrawals are allowed only after 7 years.

PPF remains a popular choice for those who want long-term, risk-free savings, especially for retirement planning.

While PPF is good for the long run, Bajaj Finance FD provides more liquidity with shorter lock-ins, making it easier to access your money when needed. Check latest FD rates.

Difference Between FD and PPF

The table below highlights the key differences between Public Provident Fund (PPF) and Fixed Deposit (FD):

ParameterFixed Deposit (FD)Public Provident Fund (PPF)
TenureFDs offer flexible tenures ranging from as short as 7 days to up to 10 years, depending on your investment goals.PPF has a fixed lock-in period of 15 years, which can be extended in blocks of 5 years.
ReturnsReturns can be structured as periodic interest payouts or received at maturity, based on investor preference.Interest is credited annually, with the balance payable at maturity.
LiquidityModerately liquid, as many FDs allow premature withdrawal, often with a penalty.Limited liquidity; partial withdrawals are allowed only from the 7th financial year onwards.
Tax BenefitsEligible for tax deduction up to Rs. 1.5 lakh under Section 80C (for tax-saving FDs).Enjoys full tax exemption under the EEE (Exempt-Exempt-Exempt) category.
Eligibility CriteriaAvailable to residents, NRIs, HUFs, trusts, firms, and corporate entities.Open only to Indian resident individuals.

How is interest calculated in FD and PPF?

  • FD: Interest is fixed at the time of investment and is compounded monthly, quarterly, or annually. Returns remain unaffected by market changes.
  • PPF: Interest is calculated annually on the lowest balance between the 5th and last day of the month. The government revises the PPF rate quarterly.

Use the Bajaj Finance FD Calculator to check your returns instantly and plan your savings with accuracy.

Maturity or Lock-in Period of PPF and FD

  • PPF: Lock-in of 15 years, extendable in blocks of 5 years. Partial withdrawals are allowed only after the 7th year.
  • FD: Flexible tenure ranging from 7 days to 10 years. Bajaj Finance FD offers a choice of 12 to 60 months, ensuring both flexibility and growth.

If 15 years feels too long, choose a Bajaj Finance FD with shorter tenures to match your financial goals without compromising on returns. Explore FD tenures!

Benefits of Fixed Deposit vs PPF

Benefits of FD

  • Safe investment offered by regulated banks and financial institutions
  • You can invest in a bank FD online within a few minutes
  • Bank FDs offer a higher interest rate than a savings account
  • Fixed returns as FD is not dependent on market movements
  • Bank FDs provide flexibility in choosing tenure
  • You can invest in multiple FDs across different banks
  • Loan facility available against a bank FD
  • Some banks offer a credit card against FD accounts
  • Highly liquid investment that can be withdrawn prematurely, subject to terms
  • Section 80C deduction available for tax saving fixed deposits
  • Higher interest rates offered to senior citizens
  • Nomination facility allows a beneficiary to receive the deposit amount in case of the investor’s demise

Benefits of PPF

  • Highly secure as PPF is backed by the government
  • Tax deductions available under Section 80C of the Income Tax Act
  • Interest earned and maturity proceeds are tax free under current tax rules
  • Interest rates are generally higher than many fixed income instruments
  • Interest rate is declared quarterly and remains fixed for the applicable period
  • Lock in period of 15 years supports long term savings
  • Partial withdrawals allowed after completion of the 7th year
  • Loan facility available against PPF investments
  • Flexible contribution from Rs.500 per year to Rs.1,50,000 per year
  • Highly stable as PPF is not linked to market fluctuations
  • Commonly used as a retirement oriented savings instrument
  • Encourages disciplined and consistent saving habits

Bajaj Finance FD has no long lock-in like PPF, making it the smarter choice for investors who want both safety and liquidity. Choose tenures ranging from 12 to 60 months and start your FD journey today!

Fixed deposit variants

Highest Credit Ratings | Trusted with over 1.4 million Deposits | Assured Returns on FD
Recommended

Fixed Deposit - 60 Months

INTEREST RATES UP TO
7.30% p.a.
Invest Online

Fixed Deposit - Senior Citizen

INTEREST RATES UP TO
7.30% p.a.
Invest Online

Fixed Deposit - Age below 60

INTEREST RATES UP TO
6.95% p.a.
Open FD

Fixed Deposit - Minor

INTEREST RATES UP TO
6.95% p.a.
Open FD

Fixed Deposit - HUF

INTEREST RATES UP TO
6.95% p.a.
Open FD

Fixed Deposit - Sole Proprietor

INTEREST RATES UP TO
6.95% p.a.
Open FD

Conclusion

Both FD and PPF are safe and trusted savings options, but the right choice depends on your financial goals. If you want long-term, tax-efficient savings, PPF is a solid option. However, if you seek guaranteed returns, shorter lock-ins, and quick liquidity, Bajaj Finance FD stands out as the better choice.

With Bajaj Finance FD, you can enjoy high interest rates, flexible tenures, and the safety of AAA-rated deposits—a combination that ensures steady financial growth. Check eligibility.

Calculate your expected investment returns with the help of our investment calculators

Investment Calculator

Recurring Deposit Calculator

Provident Fund Calculator

PPF Calculator

Gratuity Calculator

Frequently asked questions

What is the difference between PPF vs FD interest rate?

The key difference between PPF vs FD interest rates lies in how they are set and paid. PPF interest rates are fixed quarterly by the government and are generally stable. FD interest rates vary by bank and tenure, often offering higher returns based on market conditions.

Is PPF better than FD?

PPF offers investors an interest rate of 7.1%, which is comparable to or even slightly higher than that of FDs in some cases. In contrast, the interest rate on fixed deposits varies depending on the investment tenure.

How safe is Bajaj Finance FD compared to PPF?

PPF is backed by the government, while Bajaj Finance FD carries the highest AAA rating by CRISIL and ICRA, ensuring complete safety for your investments. Open FD account and earn up to 7.30% p.a. returns.

What are the interest rates for FD and PPF?

FD interest rates vary by bank, tenure, and depositor type, usually ranging between 5% and 8% per annum. PPF interest rates are set by the government and revised quarterly; they typically remain stable and are generally around the mid-7% range.

What is the tenure for FD and PPF?

FD tenures are flexible and can range from as short as 7 days to up to 10 years, depending on the bank. PPF has a fixed tenure of 15 years, with an option to extend in blocks of 5 years after maturity.

How much will I get after 15 years in PPF?

The PPF maturity amount depends on your annual contribution and the prevailing interest rate. For example, investing Rs. 1.5 lakh every year for 15 years at an average rate of around 7%–7.5% can build a corpus of approximately Rs. 40–42 lakh.

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Disclaimer

As regards deposit taking activity of Bajaj Finance Ltd (BFL), the viewers may refer to the advertisement in the Indian Express (Mumbai Edition) and Loksatta (Pune Edition) furnished in the application form for soliciting public deposits or refer https://www.bajajfinserv.in/fixed-deposit-archives
The company is having a valid Certificate of Registration dated March 5, 1998 issued by the Reserve Bank of India under section 45 IA of the Reserve Bank of India Act, 1934. However, the RBI does not accept any responsibility or guarantee about the present position as to the financial soundness of the company or for the correctness of any of the statements or representations made or opinions expressed by the company and for repayment of deposits/discharge of the liabilities by the company.

For the FD calculator the actual returns may vary slightly if the Fixed Deposit tenure includes a leap year.