PPF vs NSC: What is the difference between the two, which will be better for you?

NSC is a savings scheme of the post office. Anyone can invest in it. PPF is a savings scheme launched by the National Savings Institute.

Both PPF and NSC are safe options for investment . The amount invested in both of these is guaranteed to be safe and get returns. Tax benefits are available in both. There are many things in common between the two, while there are also some plus and minus points, due to which investors get confused as to which one to invest in. Experts say that both are good options, but which one to choose depends on your financial goals.

What is NSC ?

National Savings Certificate ( NSC ) is a savings scheme of the post office. Anyone can invest in it. A minimum investment of Rs 100 is required in this. The tenure of this scheme is 5 years and after that it cannot be extended, but after completion of 5 years you can buy new NSC at the same interest rate . In this, fixed interest is available for the entire period, which is currently 6.8 % . Both principal and interest get tax benefit under section 80C.

What is PPF ?

Public Provident Fund ( PPF ) is called an investment cum tax-saving instrument. This is a long-term savings scheme launched by the National Savings Institute in 1968. It is guaranteed by the government. The amount invested in this gets locked for 15 years. After 15 years you can extend it for 5 years. One can invest a minimum of Rs 500 and a maximum of Rs 1.5 lakh in a year. You can open only one PPF account.

In this, the government is currently offering 7.1 percent interest rate. You can seek tax relief on investment in this. The interest and maturity amount received in this is also tax-free.

Comparison of NSC and PPF





5  years

15  years Can extend for  5  years

Minimum investment 



maximum investment 

there is no limit 

Rs. 1.5 lakh

Rate of interest



account holding rule 

single or joint holder 

Only one holder for each account 

account limit 

You can open any number of  NSCs in your name There is a maximum limit of Rs 10,0000 per certificate .  

person can open only one PPF  account in his name  You can become a joint holder only if the account is in the name of the child .  

loan facility 

can take loan 

Loan can be taken in 3rd and 5th year only 

tax benefit 

In a financial year  Rs. The principal amount up to 1.5  lakh is tax-free. The interest amount is taxed .  

In a financial year  Rs. Investment up to 1.5  lakh is tax-free. The interest and maturity amount is also tax-free.  

Who is NSC Right for?

If you want to invest for the short term NSC is the right choice, but NSC how much return will be after tax in the basis of your other 80 C -dependent deduction. NSC can come in handy in achieving your short-term goals with small amounts.

Who is PPF right for?

If you want to invest for a long-term goal like retirement savings and are not worried about liquidity, then PPF is a good option for you. Although it has a lock-in of 15 years, but if you want, you can extend it for a period of 5-5 years.

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Article first Appeared on Informalnewz

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