For long-term safe savings, Indians typically choose between LIC, PPF and FD. Each has a place — here's a clean, no-marketing comparison.
The Three Products in 60 Seconds
- LIC endowment (915, 936 etc.): 15-25 year savings plan with life cover. Returns ~5–6% tax-free. Insurance bundled in.
- PPF: 15-year Government savings scheme. Currently 7.1% p.a., fully tax-free. Max ₹1.5 lakh/yr. No insurance.
- FD: Bank fixed deposit, 7 days to 10 years. Returns 6.5–8%, fully taxable. No insurance.
Returns Comparison (Tax-Adjusted, 15 Years, ₹1.5 Lakh/Year)
| Parameter | PPF (7.1%) | LIC (5.5%) | FD (7.5% pre-tax) |
|---|---|---|---|
| Total invested | ₹22,50,000 | ₹22,50,000 | ₹22,50,000 |
| Gross maturity | ~₹40,30,000 | ~₹37,00,000 | ~₹39,20,000 |
| Tax on returns | Nil (EEE) | Nil (10(10D)) | ~₹4,20,000 (30% slab) |
| Post-tax maturity | ₹40,30,000 | ₹37,00,000 | ₹35,00,000 |
| Life cover | None | Yes (bonus + SA) | None |
| Liquidity | Partial from year 7 | Poor (surrender loss) | Good (premature + penalty) |
When to Pick What
Choose PPF when
- You want sovereign-guaranteed, tax-free long-term savings
- You don't need life cover
- You have 15+ years to lock in money
- You want a retirement/child-education corpus that the whole family trusts
Choose LIC when
- You want insurance + savings bundled
- You want tax-free returns with a single product
- You're 18–50 and want life cover that continues past maturity (Jeevan Anand 915)
- You want a forced-savings mechanism (lapse fear = discipline)
Choose FD when
- You need capital safety with high liquidity
- You have a short-to-medium horizon (1–5 years)
- You're in a low/no tax bracket (TDS doesn't bite)
- You're saving for a specific near-term goal
The Smart Combination
- Term plan — life cover (₹1 Cr+)
- PPF — 15-year tax-free retirement / child corpus
- FD — emergency fund + 1-3 year goals
- LIC endowment — optional, for tax-saving convenience or specific dated goal