Benefits of National Pension Scheme (NPS) vs Public Provident Fund (PPF)


The National Pension Scheme and Public Provident Fund are two popular schemes used across the country for their respective features and benefits. Let us take a deeper look into what these features are and how they would benefit us.

As the name suggests, the NPS is a scheme set up with a specified focus on retirement. It is primarily run with the aim of enabling you to save money and secure investments to guarantee a seamless retirement. In order to do that effectively, the NPS offers a variety of benefits.


        It is accessible from all parts of the country and does not impose any geographical restrictions. That makes it available for all Indians across all states, allowing them to invest in their future.

        It offers control over your investment by allowing you to choose the various managers and service providers who would look after your account. That allows you to take up the account’s full authority and run it in a manner you deem fit.

        The third and perhaps the most important of all, the NPS is financially accessible. It is one of the cheapest investment products available in the Indian market. As a result, it can be accessed and run by people from various walks of life.

Owing to these benefits, the NPS makes a good investment for retirement. However, the problem arises in what lies before retirement. You see, the funds in an NPS account cannot entirely be accessed before retirement. They only reach maturity when you turn 60 years old, and in the years before that, you can only access a maximum of 25%.

In such a situation, the Public Provident Fund proves to be a valuable addition. The PPF is a long-term saving and investment instrument that matures within 15 years and can be extended in blocks of 5 more years. That makes a PPF far more accessible than an NPS. To see this in practice, please refer to our PPF Maturity Calculator.

Along with that, the PPF also offers other benefits that are far more user-friendly than an NPS. The most important one is that a PPF account allows you to withdraw your funds whenever you would like partially. However, there are certain restrictions to this. PPF funds are only available for withdrawal five years after the inception of the account, and the amount is restricted at 50% of the balance in the account at the end of the previous financial year. To understand this in more detail, please refer to our PPF Return Calculator.

That said, the most important thing to remember is that the National Pension Scheme and Public Provident Fund are run with different aims and hence have different objectives. It is best to pick a plan that goes with your current objectives. For example, if your aim is to invest for retirement, it is best to look into the National Pension Scheme. However, if your aim is to invest in your wedding, education, or another major personal milestone, it is best to look into the PPF. To fully understand how this works and what benefits you can derive, please refer to our PPF Calculator.