Detailed comparison of PPF (7.1% tax-free) and National Savings Certificate (NSC) (7.7 (current rate)%) to help you choose the right investment.
| Year | Deposit | Interest | Balance |
|---|
| Feature | PPF | NSC |
|---|---|---|
| Returns | 7.1% p.a. (guaranteed) | 7.7 (current rate)% |
| Lock-in Period | 15 Years | 5 years |
| Tax on Returns | Fully Tax-Free (EEE) | Interest taxable, but reinvested interest qualifies for 80C |
| Section 80C | Yes (up to ₹1.5 lakh) | Yes (up to ₹1.5 lakh) |
| Risk Level | Zero (Govt backed) | Zero (Government backed) |
| Liquidity | Low (partial after 7 years) | Low (5-year lock-in, no premature withdrawal normally) |
| Best For | Long-term tax-free guaranteed growth | Medium-term guaranteed returns with tax benefit |
NSC has shorter lock-in and slightly higher rate, but interest is taxable. PPF's EEE status makes it better for long-term tax-free growth.
See how much your PPF investment can grow over different tenures:
| Yearly Deposit | Total Deposited | Interest Earned | Maturity Value |
|---|---|---|---|
| ₹500/yr | ₹7,500 | ₹6,063 | ₹13,563 |
| ₹1,000/yr | ₹15,000 | ₹12,121 | ₹27,121 |
| ₹2,000/yr | ₹30,000 | ₹24,241 | ₹54,241 |
| ₹3,000/yr | ₹45,000 | ₹36,363 | ₹81,363 |
| ₹5,000/yr | ₹75,000 | ₹60,606 | ₹1,35,606 |
| ₹10,000/yr | ₹1,50,000 | ₹1,21,215 | ₹2,71,215 |
| ₹12,000/yr | ₹1,80,000 | ₹1,45,455 | ₹3,25,455 |
| ₹15,000/yr | ₹2,25,000 | ₹1,81,823 | ₹4,06,823 |
| ₹20,000/yr | ₹3,00,000 | ₹2,42,428 | ₹5,42,428 |
| ₹25,000/yr | ₹3,75,000 | ₹3,03,036 | ₹6,78,036 |
| ₹30,000/yr | ₹4,50,000 | ₹3,63,638 | ₹8,13,638 |
| ₹40,000/yr | ₹6,00,000 | ₹4,84,858 | ₹10,84,858 |
| ₹50,000/yr | ₹7,50,000 | ₹6,06,070 | ₹13,56,070 |
| ₹60,000/yr | ₹9,00,000 | ₹7,27,283 | ₹16,27,283 |
| ₹70,000/yr | ₹10,50,000 | ₹8,48,497 | ₹18,98,497 |
| ₹80,000/yr | ₹12,00,000 | ₹9,69,708 | ₹21,69,708 |
| ₹90,000/yr | ₹13,50,000 | ₹10,90,925 | ₹24,40,925 |
| ₹1,00,000/yr | ₹15,00,000 | ₹12,12,139 | ₹27,12,139 |
| ₹1,20,000/yr | ₹18,00,000 | ₹14,54,569 | ₹32,54,569 |
| ₹1,50,000/yr | ₹22,50,000 | ₹18,18,208 | ₹40,68,208 |
PPF offers 7.1% guaranteed tax-free returns with a 15-year lock-in, while NSC offers 7.7 (current rate)% returns with 5 years lock-in. PPF has EEE tax status making it fully tax-free, whereas NSC: Interest taxable, but reinvested interest qualifies for 80C.
NSC has shorter lock-in and slightly higher rate, but interest is taxable. PPF's EEE status makes it better for long-term tax-free growth.
Yes, you can invest in both PPF and NSC. However, the combined Section 80C deduction limit is ₹1,50,000 per year. Many investors diversify across both instruments to balance risk and returns.
PPF is backed by the Government of India and carries zero risk with guaranteed returns. NSC has zero (government backed) risk. If capital preservation is your priority, PPF is the safer choice.
PPF has EEE status — deposits, interest, and maturity are all tax-free. NSC Section 80C: Yes (up to ₹1.5 lakh). Tax on returns: Interest taxable, but reinvested interest qualifies for 80C.