Banks offer an annual return of 6.25% to 6.75% per annum on one-year fixed deposits (FD) and 6.5% to 7% on long-duration FDs, while PPF offers 7.1% per annum, Mint reported. However, income from FD (interest) is taxable, whereas income from PPF is tax-free. FD can be redeemed based on a person's wish, but PPF has a 15-year lock-in period.