NPS vs PPF
PPF is a guaranteed, tax-free account. NPS is a market-linked pension with a lock-in until 60. They are not substitutes.
| National Pension System | PPF | |
|---|---|---|
| Return | Market-linked, no guarantee | 7.10%, notified quarterly |
| Lock-in | Until 60 (Tier I) | 15 years, partial access from year 6 |
| Tax on exit | 60% of the corpus is tax-free, 40% must buy an annuity | Entirely tax-free |
| Extra deduction | 80CCD(1B): ₹50,000 beyond 80C, in both regimes | Within the ₹1.5 lakh 80C cap, old regime only |
| Risk | Yours | None beyond the government's own |
NPS exists for a specific reason: it is the only route to an extra ₹50,000 deduction under 80CCD(1B), and it stays available under the new regime. That is a real benefit if you are in the 30% bracket.
But 40% of the corpus must buy an annuity at 60, and the annuity rate is whatever it is that day. PPF gives you a smaller, certain, entirely tax-free amount with no forced purchase at the end.
Rules per the PFRDA and the Income-tax Act; PPF rate from the National Savings Institute, quarter beginning 2026-10-01.