INSUBCONTINENT EXCLUSIVE:
PPF vs NPS Comparison: NPS, PPF account offer financial security to subscribers at a later stage of life.PPF (Public Provident Fund) account
and National Pension System (NPS) account offer financial security to subscribers at a later stage of life
According to SBI's corporate website- sbi.co.in, PPF account provides an investment avenue with decent returns coupled with income tax
National Pension System (NPS) which is administered and regulated by Pension Fund Regulatory and Development Authority (PFRDA) provides
the NPS subscribers, and the scope of making more money by virtue of its higher exposure to equity instruments.Interest RatesAccording to
SBI, the rate of interest of PPF account is determined by central government on quarterly basis
At present the rate of interest for a PPF account is 8 per cent per annum
Interest is calculated on the minimum balance (in PPF Account) between 5th day and end of the month and is paid on March 31 every
LimitsA minimum of Rs 500 subject to a maximum of Rs 1,50,000 per annum can be deposited in a PPF
The amount can be deposited in lump sum or in a maximum of 12 installments per year
Subscribers must make a minimum contribution of Rs 1,000 per annum for the tier 1 account
For the tier-2 account of NPS, there is no minimum requirement of contribution, according to SBI's website.MaturityThe original duration of
SBI's PPF account is 15 years
a longer lock-in than PPF account and the corpus stays locked-in till the age of 60 years
Withdrawal before 60 is also allowed but in that case at least 80 per cent of the corpus ought to be allocated to annuity, which is a
tax-free withdrawal.Tax BenefitsUnder PPF account, income tax benefits are available under Section 88 of Income Tax Act
Interest income is totally exempt from Income Tax
Amount outstanding to the credit is fully exempted from Wealth Tax also.Meanwhile, the Tier 1 NPS account offers tax benefits while the Tier
