Hello, my father is confused about his retirement plan. Which is better for retirement – PPF or NPS?
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My father had the same question when he started planning for retirement. Both PPF and NPS are good but they have a bit different purposes.
What to choose PPF or NPS?
PPF is very safe and gives fixed returns. Your money will be completely tax-free at maturity. But it has a long lock-in of 15 years and you cannot withdraw whole amount before that except some amounts.
NPS is made mainly for retirement. It invests your money in a combination of equity and debt, so the returns you’ll receive can be higher over the long term but they are not guaranteed. NPS also offers extra tax benefits under Section 80CCD(1B), which PPF doesn’t. Well the money is locked until retirement age and partial withdrawals have rules.
PPF vs NPS for Retirement
| Feature | PPF (Public Provident Fund) | NPS (National Pension System) |
|---|---|---|
| Safety | Very safe (Govt-backed) | Moderate (market-linked) |
| Returns | ~7–8% | ~8–10% (varies with market) |
| Lock-in | 15 years (extendable in 5 yrs) | Till age 60 |
| Liquidity | Partial withdrawal after 7 yrs | Limited partial withdrawal before 60 |
| Tax Benefit | Up to Rs. 1.5 lakh (Sec 80C) | Rs. 1.5 lakh (80C) + Rs. 50,000 (80CCD(1B)) |
| Retirement Income | Lump sum withdrawal possible | Compulsory annuity for pension |
| Best For | Safe, long-term savers | Higher growth + retirement pension |
So, for complete safety and tax-free returns i would say PPF is better. For long-term retirement planning with higher returns NPS works well. Many people, including me, actually use both to balance safety and growth.
https://finanjo.com/tools/ppf-calculator