NPS vs PPF | Which one is the better Retirement Plan?

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People belonging to middle-class families save the money they earn instead of spending it. Apart from that, they should also make some investments, things like this will be very helpful for their future. This blockbuster has already been laid out about how all such investments can be made. In this blog post, we will discuss NPS vs PPF which is better among these two retirement plans.

Also, know what are the differences between these two plans and how the interest varies. Apart from that you will also find some issues related to its tenure period and where to open these accounts. NPS stands for National Pension Scheme and PPF stands for Public Provident Fund. Both these plans are 100% safe without any issues. Apart from that both these plans can give you higher returns. Let us now know all about the positive and negative aspects of these two retirement retirement plans.

First, let’s see what are the differences between these NPS and PPF retirement plans.

EligibilityBetween 18-70 Years of AgeIndian Citizen Minor
MaturitySubscribers become 60-year-oldAfter 15 years
Return TypeMarket LinkedGovt Guaranteed Returns
Rate of ReturnCould be 9-11%7.1%
Minimum Annual ContributionRs. 1000Rs. 500
Tax BenefitsUpto 1.5 Laks under Section 80CUpto 1.5 Laks deductible

Let’s first know about tax benefits in PPF. There is no tax on the amount you invest. There is no tax on the returns you get from investing. Apart from that, the final amount you get is tax-free. But in NPS only 60% of the last amount you get will be returned and the remaining 40% will be added to the pension scheme. 60% of the amount you get is tax-free.

If you want to extend the maturity date in NPS, you can do it up to ten years. But in PPF, you can extend the tenure period only for five years. In NPS the amount can be withdrawn only after three years and in PPF only after six years. Only 25% can be availed after three years in NPS and 50% after six years in PPF.

If you want to get a high amount in PPF then you have to wait for at least 20 years. But in NPS you can get the amount in less years than PPF. Because in NPS they will invest your amount in multiple ways. But in PPF your amount is invested only in one place and hence you have to wait for many years to get your returns.

In our comparison so far we have to say that NPS is greater than its PPF. But when you choose think and act according to what suits you best. Or choose a good advisor and invest according to his advice and get returns. To know more about these retirement plans comment in the comment section of this blog posting.