Detailed comparison of PPF (7.1% tax-free) and National Pension System (NPS) (8 - 10 (historical average)%) to help you choose the right investment.
| Year | Deposit | Interest | Balance |
|---|
| Feature | PPF | NPS |
|---|---|---|
| Returns | 7.1% p.a. (guaranteed) | 8 - 10 (historical average)% |
| Lock-in Period | 15 Years | Till age 60 |
| Tax on Returns | Fully Tax-Free (EEE) | Partially taxable (60% corpus tax-free, 40% must buy annuity) |
| Section 80C | Yes (up to ₹1.5 lakh) | Yes (₹1.5L under 80C + ₹50K extra under 80CCD(1B)) |
| Risk Level | Zero (Govt backed) | Moderate (mix of equity, debt, government securities) |
| Liquidity | Low (partial after 7 years) | Very Low (locked till 60, partial withdrawal after 3 years) |
| Best For | Long-term tax-free guaranteed growth | Retirement planning with additional tax benefit |
NPS offers additional ₹50K tax deduction and potentially higher returns. PPF is fully tax-free and more flexible with 15-year lock-in.
See how much your PPF investment can grow over different tenures:
| Yearly Deposit | Total Deposited | Interest Earned | Maturity Value |
|---|---|---|---|
| ₹500/yr | ₹7,500 | ₹6,063 | ₹13,563 |
| ₹1,000/yr | ₹15,000 | ₹12,121 | ₹27,121 |
| ₹2,000/yr | ₹30,000 | ₹24,241 | ₹54,241 |
| ₹3,000/yr | ₹45,000 | ₹36,363 | ₹81,363 |
| ₹5,000/yr | ₹75,000 | ₹60,606 | ₹1,35,606 |
| ₹10,000/yr | ₹1,50,000 | ₹1,21,215 | ₹2,71,215 |
| ₹12,000/yr | ₹1,80,000 | ₹1,45,455 | ₹3,25,455 |
| ₹15,000/yr | ₹2,25,000 | ₹1,81,823 | ₹4,06,823 |
| ₹20,000/yr | ₹3,00,000 | ₹2,42,428 | ₹5,42,428 |
| ₹25,000/yr | ₹3,75,000 | ₹3,03,036 | ₹6,78,036 |
| ₹30,000/yr | ₹4,50,000 | ₹3,63,638 | ₹8,13,638 |
| ₹40,000/yr | ₹6,00,000 | ₹4,84,858 | ₹10,84,858 |
| ₹50,000/yr | ₹7,50,000 | ₹6,06,070 | ₹13,56,070 |
| ₹60,000/yr | ₹9,00,000 | ₹7,27,283 | ₹16,27,283 |
| ₹70,000/yr | ₹10,50,000 | ₹8,48,497 | ₹18,98,497 |
| ₹80,000/yr | ₹12,00,000 | ₹9,69,708 | ₹21,69,708 |
| ₹90,000/yr | ₹13,50,000 | ₹10,90,925 | ₹24,40,925 |
| ₹1,00,000/yr | ₹15,00,000 | ₹12,12,139 | ₹27,12,139 |
| ₹1,20,000/yr | ₹18,00,000 | ₹14,54,569 | ₹32,54,569 |
| ₹1,50,000/yr | ₹22,50,000 | ₹18,18,208 | ₹40,68,208 |
PPF offers 7.1% guaranteed tax-free returns with a 15-year lock-in, while NPS offers 8 - 10 (historical average)% returns with Till age 60 lock-in. PPF has EEE tax status making it fully tax-free, whereas NPS: Partially taxable (60% corpus tax-free, 40% must buy annuity).
NPS offers additional ₹50K tax deduction and potentially higher returns. PPF is fully tax-free and more flexible with 15-year lock-in.
Yes, you can invest in both PPF and NPS. However, the combined Section 80C deduction limit is ₹1,50,000 per year (NPS provides an additional ₹50,000 deduction under Section 80CCD(1B)). Many investors diversify across both instruments to balance risk and returns.
PPF is backed by the Government of India and carries zero risk with guaranteed returns. NPS has moderate (mix of equity, debt, government securities) risk. If capital preservation is your priority, PPF is the safer choice.
PPF has EEE status — deposits, interest, and maturity are all tax-free. NPS Section 80C: Yes (₹1.5L under 80C + ₹50K extra under 80CCD(1B)). Tax on returns: Partially taxable (60% corpus tax-free, 40% must buy annuity).