Skip to main content

Rajkumar Anguluri·Software Engineer · Founder, Artha Engine·Last reviewed 13 April 2026·Methodology

Independent decision-support tool. Artha Engine is not a financial services provider, does not sell loans or insurance, and has no commission relationships with banks or insurers.

Comparison

NPS vs PPF

Which retirement lock-in is worth it for your tax bracket? Compare NPS equity returns against PPF's guaranteed, tax-free compounding.

Your numbers

Same monthly contribution — NPS with equity allocation vs PPF with guaranteed rate.

₹5K

Save & share this scenario

Bookmark these inputs, copy a link, or send the result to someone.

Verdictmedium confidence

Lump-sum at retirement

₹41.2L

PPF wins on tax-free, guaranteed returns

PPF maturity is ₹1.1L more than NPS lump-sum. PPF is fully tax-free (EEE) with sovereign guarantee.

PPF is capped at 15 years per account. For longer horizons, NPS equity allocation may catch up.

Head to head

NPS lump-sum vs PPF

NPS

₹40.1L

PPF

₹41.2L

Winner

PPF wins by 3%.

PPF's guaranteed 7.1% compounds safely.

NPS total corpus

₹66.9L

NPS lump-sum

₹40.1L

NPS annuity portion

₹26.8L

PPF maturity

₹41.2L

Total invested

₹15L

NPS corpus over time

Year-by-year NPS growth path

₹1Cr₹50L₹0
Yr 1Yr 6Yr 11Yr 15Yr 20Yr 25

NPS locks 40% in annuity at retirement

You cannot withdraw the full NPS corpus — at least 40% must be used to purchase an annuity. PPF has no such restriction.

PPF is fully tax-free (EEE)

PPF contributions get 80C deduction, interest is tax-free, and maturity is tax-free. NPS lump-sum withdrawal (up to 60%) is also tax-free, but annuity income is taxable.

At a glance

What it compares
NPS total corpus (with annuity split) vs PPF maturity. Same monthly contribution, different risk-return profiles.
Key insight
NPS can build a larger corpus but locks 40% in annuity. PPF is fully liquid at maturity and tax-free.
Who should use this
Anyone deciding between NPS and PPF for their long-term retirement allocation.
Verdict logic
Compares NPS lump-sum portion against PPF maturity. NPS wins on corpus size; PPF wins on flexibility and tax treatment.

How It Works

This is the drill-down layer. The flagship flow leads with a recommendation, and this page lets you inspect the underlying model.

  • NPS corpus via SIP FV formula. PPF via annual compounding at declared rate.
  • Delta = NPS lump-sum − PPF maturity.

Assumptions

The recommendation stays blunt, but the assumptions remain visible.

  • NPS returns assume equity-heavy allocation.
  • PPF rate assumed constant at current rate.
  • PPF capped at 15 years per account.

FAQ

The follow-up questions people usually ask after the main recommendation is already clear.

Can I invest in both NPS and PPF?

Yes. Many planners recommend both: NPS for equity exposure + 80CCD(1B) deduction, PPF for guaranteed debt allocation + 80C.

Which has better tax benefits?

NPS gets an additional ₹50k deduction under 80CCD(1B) beyond the ₹1.5L 80C limit. PPF contributions count within the 80C limit. NPS wins on deduction; PPF wins on tax-free maturity.

Sources & references

Every formula and assumption above is grounded in these authoritative sources.

Related tools & decisions

Keep going from here — each link carries the same cluster context.

What to do next

Model your NPS corpus

Equity allocation drives outcomes

Model pure PPF

15-year sovereign-backed baseline

See both in the full retirement plan

NPS + PPF rarely hits the corpus alone

Comparison pages

PPF vs EPF — Which Tax-Free Debt Wins?

Should you top up PPF or let EPF do the heavy lifting? See how both government-backed vehicles compare for the same annual contribution, what the rate gap means over time, and which lock-in suits your timeline.

Parent decision

Am I On Track?

Plan

Build a long-term plan that covers your safety net, net worth, specific goals, and financial independence.

Related guides

Long-form explainers that put the math behind this tool in context.

Guide9 min

NPS vs PPF in 2026: Which Should You Invest In?

Both NPS and PPF are government-backed retirement savings instruments. But they work very differently. Here's how to choose, and why most people should use both.

Calculations and decision frameworks, not personalised financial advice. The numbers on this page are based on the inputs you supplied and the regulatory rules in effect when this page was last reviewed. They are not a recommendation to buy, sell, hold, port, or surrender any specific financial product. Consult a SEBI-registered investment advisor, a qualified tax professional, or a licensed insurance broker before acting on a financial decision involving your money.

Artha Engine is an educational decision-support website. We do not offer loans, sell insurance, distribute mutual funds, provide regulated investment advice, collect loan applications, or receive commissions from banks, insurers, AMCs, brokers, or other financial providers. References to RBI, SEBI, IRDAI, Income Tax Department, or other authorities are source citations only. Artha Engine is not affiliated with, endorsed by, or sponsored by any government authority, regulator, bank, insurer, AMC, or broker. Artha Engine does not charge users fees for using calculators, comparison tools, articles, or financial health scoring. Mailing address: India.

Methodology · Corrections · Terms · Privacy