FD vs PPF vs NSC: Which Gives You More in 2026?
The government has kept small savings scheme rates unchanged for April–June 2026. So how do PPF, NSC, and Sukanya Samriddhi compare to bank FDs right now? If you have money to park, this comparison helps you pick the right option based on your tax bracket, lock-in comfort, and return goals.
If you invest ₹1.5 lakh per year in PPF for 15 years, you could walk away with over ₹40 lakh — completely tax-free. That's roughly the cost of a decent 1BHK in a Tier-2 city, built purely from disciplined savings.
Sukanya Samriddhi Scheme currently offers 8.2% annually — tax-free — meaning your ₹1 lakh deposit earns ₹8,200 a year without a single rupee going to the government as tax.
Key Takeaways
If you're in the 30% tax bracket, PPF's 7.1% tax-free return is effectively better than most bank FDs offering 7–7.5% (which are fully taxable) — calculate your post-tax yield before locking in.
For parents with daughters under 10, Sukanya Samriddhi Account at 8.2% with full tax exemption (EEE status) beats almost every FD in the market — open one before your daughter turns 10.
If you need a shorter lock-in, NSC (5-year tenure, 7.7% interest) is a solid middle ground — the interest is taxable but qualifies for Section 80C deduction, making it useful for tax planning.
Every quarter, the government reviews interest rates on small savings schemes like PPF, NSC, and Sukanya Samriddhi. For April–June 2026, those rates have been kept unchanged — which means you can now plan with certainty for the next few months.
Here's a quick snapshot of where things stand. The Public Provident Fund (PPF) offers 7.1% per annum, compounded annually, with a 15-year lock-in. The National Savings Certificate (NSC) gives 7.7% for a 5-year term. Sukanya Samriddhi Account (SSA) leads the pack at 8.2%, but only for families with daughters below 10 years old. Senior Citizen Savings Scheme (SCSS) offers 8.2% as well. Meanwhile, top bank FDs from SBI, HDFC Bank, and ICICI Bank are hovering in the 6.5–7.5% range depending on tenure, though some smaller banks and NBFCs offer up to 8–8.5%.
The real question isn't just which rate is higher — it's about post-tax returns. Bank FD interest is fully taxable as per your income slab. PPF, SSA, and some other small savings schemes carry EEE (exempt-exempt-exempt) status, meaning contributions, interest, and maturity are all tax-free. For someone in the 30% bracket, a 7.1% PPF return is more valuable than a 7.5% taxable FD.
That said, small savings schemes come with longer lock-ins and limited liquidity. FDs offer more flexibility — you can choose tenures from 7 days to 10 years, and premature withdrawal is usually allowed with a small penalty. If you might need the money in 1–2 years, an FD makes more sense than PPF.
Pro tip: Build a layered savings strategy — keep 3–6 months of expenses in a liquid FD or savings account, use PPF or SSA for long-term tax-free wealth, and explore GoCredit to compare loan and investment options tailored to your financial profile. Don't put everything in one basket just because the rate looks good on paper.
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