NPS vs PPF: Which Option Will Help You Retire Richer?

Discover the ultimate choice for your retirement investment options by exploring this comparison between NPS and PPF if you are curious.

nps (1255), ppf (1143), Pension Scheme (2768), public provident fund (1133)

Are you planning for your retirement corpus and wondering which investment option to choose, NPS or PPF? The Public Provident Fund (PPF) and National Pension System (NPS) are two popular investment options for building a retirement corpus. PPF is a long-term, government-backed investment option, while NPS is a market-linked investment option. In this article, we'll compare NPS vs PPF to help you make an informed decision on which investment choice is better for building a healthy and adequate retirement corpus.

Difference between NPS and PPF: Which is better?

What is PPF?

Launched in 1965, PPF is a government scheme for building a retirement corpus. It's accessible nationwide, with a 15-year lock-in period, guaranteed interest rate, and tax benefits under Section 80C. Risk-averse individuals favour PPF's guaranteed returns, and its current interest rate is 7.1%.

What is NPS?

NPS is a market-linked retirement scheme for building a corpus and receiving a pension during retirement. Individuals aged 18 to 65 can join, but withdrawals are restricted until the age of 60. NPS interest rates are market-linked, and partial withdrawals are permitted for specific purposes like education, marriage, and critical illness.

Read article: Own multiple PPF accounts? Here’s how you can combine multiple PPF accounts into one

The table given below highlights the differences between the two schemes on various criteria:

differences between the two schemes on various criteria

The table given below shows the difference in the retirement corpus (figures are just indicative):

(Note: Retirement corpus calculated using formula FV(rate, nper, pmt, [pv], [type]))

Read article: NPS Charges Hiked: Having an NPS account will cost you more. Read to find out


Both the National Pension Scheme (NPS) and Public Provident Fund (PPF) present distinct advantages when it comes to constructing a retirement corpus. Savvy investors can diversify their retirement portfolio by incorporating both NPS and PPF, thereby reaping the rewards of fixed returns offered by PPF, as well as the potential market-generated returns facilitated by NPS. PPF is particularly well-suited for risk-averse individuals, given its guarantee of returns. Conversely, NPS grants investors greater control over their investments while providing the opportunity for market-linked returns. To make a well-informed decision, it is essential to carefully evaluate your investment objectives, risk tolerance, and the associated tax benefits.

Disclaimer: This article is intended for general information purposes only and should not be construed as investment or legal advice.

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