PPF vs NPS corpus comparison.
Higher corpus
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PPF (tax-free)
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NPS (market-linked)
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Your breakdown
Updates live as you type| Item | PPF at 7.1% | NPS at 10% |
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PPF and NPS solve two different problems
People treat this as a contest, but PPF and NPS are not really rivals. PPF is a guaranteed, government-administered debt instrument: you put in up to ₹1.5 lakh a year, the Centre fixes the rate every quarter (7.1% as of the latest review), and the maturity is fully exempt under the EEE structure. NPS is a market-linked retirement account where your money sits in a mix of equity, corporate bonds, and government securities, and the eventual corpus rides the market. So the honest comparison is not "which gives more" but "how much certainty am I willing to trade for upside". This calculator runs both on the same annual contribution and horizon so you can see the spread in rupees.
The tax angle that actually moves the decision
Both qualify for the ₹1.5 lakh Section 80C deduction, but NPS carries an extra ₹50,000 deduction under Section 80CCD(1B) that nothing else gives you. If you are still on the old regime, that is the single most efficient ₹50,000 of deduction available, knocking off up to ₹15,600 of tax in the 30% slab. The catch sits at the exit. With NPS, 60% of the corpus can be withdrawn tax-free at 60, but the remaining 40% must buy an annuity, and that annuity pension is taxed every year as ordinary income at your slab. PPF has no such string: the entire maturity lands in your bank account with zero tax. One more nuance for salaried readers: the new tax regime removed almost every deduction, so if you have moved to it, the 80C and 80CCD(1B) benefits no longer apply, and NPS loses part of its shine. The employer NPS contribution under 80CCD(2), up to 14% of basic in the new regime, survives, which is why corporate NPS is still worth grabbing.
A 25-year run at ₹1.5 lakh a year
Take the default: ₹1.5 lakh invested every year for 25 years, PPF compounding at 7.1% and NPS assumed at 10%. The calculator contributes at the start of each year and then grows the balance, so both build as an annuity. Here is where they land.
The headline gap is roughly ₹59 lakh in NPS’s favour. That looks decisive until you remember the 10% NPS figure is an assumption, not a promise, and that a chunk of the corpus turns into a taxable pension. PPF’s ₹1.03 crore, by contrast, is close to a contractual outcome.
How most disciplined investors actually use both
A practical split that I have seen work: fill PPF to its ₹1.5 lakh ceiling for the guaranteed, tax-free base, then route the extra ₹50,000 into NPS purely to bag the 80CCD(1B) deduction, and keep the bulk of your long-horizon equity exposure in plain index mutual funds where there is no annuity lock and full liquidity. PPF gives you the floor, mutual funds give you the flexibility, and NPS earns its keep mainly through the tax break and the forced discipline of a 60-year lock. Treat them as roles in a portfolio, not as a single winner.
Can I withdraw NPS money like I can from PPF?
Not as freely. PPF allows partial withdrawals from year 7 and a loan from year 3. NPS is locked until 60 except for narrow partial withdrawals (up to 25% of your own contribution for things like a house, child’s education, or serious illness), and even at exit you must annuitise 40%. If liquidity matters to you, that asymmetry is the real cost of NPS.
Does the PPF rate stay fixed for the whole 25 years?
No. The PPF rate is reset by the government every quarter and has drifted between roughly 7.1% and 8.7% over the last decade. The calculator holds your chosen rate flat for simplicity, so treat the PPF corpus as a central estimate rather than a locked figure.