Reviewed by Artha Research·Last updated 13 April 2026
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.
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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.
NPS lump-sum vs PPF
NPS
₹40.1L
PPF
₹41.2L
WinnerPPF 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
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.
Sibling tools
NPS Calculator
See what your NPS corpus will look like at retirement — including the mandatory annuity split and tax-free lump-sum withdrawal.
PPF Calculator
Will 15 years of PPF actually build a meaningful tax-free corpus? See the maturity amount, what drives it, and whether maxing the ₹1.5L cap is worth it for you.