PPF vs NPS: You should also know which scheme is best for retirement PPF or NPS..

After a long job, everyone wants to retire well and everyone wants to live a happy old age and in such a situation, people start investing in many schemes. Most people invest in PPF or NPS, although these two schemes of the government can give you very good returns.

Public Provident Fund (PPF) and National Pension Scheme (NPS), both the schemes are supported by the Central Government. The basic difference between PPF and NPS is that the former gives a fixed return and the latter is linked to market returns. Being linked to the market means that there can be more risk and the returns can also be higher.

National Pension Scheme
NPS (National Pension Scheme) was started in 2004. This scheme allows people to contribute to savings under planning, thereby securing their future in the form of a pension (National Pension Scheme news). It allows you to invest in schemes that combine equity with corporate and government debt securities.

For the National Pension Scheme (National Pension Scheme latest update), you can open an account in any bank, post office, or insurance company. On the maturity of the NPS (National Pension Scheme) account, the investor has to invest at least 40 percent of the amount in annuity. The subscriber gets a pension from this amount. An annuity is a kind of contract between you and the insurance company. Under this contract, it is necessary to buy an annuity of at least 40 percent of the amount in the National Pension System (NPS). The higher this amount, the higher will be the pension amount.

Benefit of NPS
On maturity of the NPS (National Pension Scheme), 60 percent of the amount is tax-free. The tax has to be paid only on 40 percent of the amount. The limit for contribution to the NPS account of government employees is 14 percent. You can claim tax exemption under this scheme. The limit of tax exemption under section 80CCE is Rs 1.5 lakh.

Public Provident Fund
PPF (Public Provident Fund) is considered to be a scheme that provides risk-free guaranteed returns. It can be used as a long-term investment tool by salaried people, professionals, and even the self-employed. Under this scheme (Public Provident Fund investment), even those people who are not part of any company can invest. It is a debt investment tool and a salaried individual can claim tax exemption under Section 80C of the IT Act, 1961. Under this scheme, the amount invested, interest earned, and maturity are tax-free.

The difference in returns between the two schemes
If we look at the inflation and pre-tax returns of PPF (Public Provident Fund), it is still an excellent investment instrument. PPF (Public Provident Fund's latest update) is a good way to create a long-term retirement fund. However, there is no provision for monthly pensions in this. If we talk about NPS, a lump sum amount is also given in it and a pension is also made. Here, on the basis of a calculation, you can understand which scheme can give you how much money.

  If you invest Rs 1.5 lakh annually in PPF (Public Provident Fund), it will become Rs 96 lakh in 25 years at a 7.1 percent interest rate. Similarly, if you invest Rs 1.5 lakh annually in NPS, you can earn around Rs 1 crore 72 lakh after 25 years. Since NPS is linked to equity, there is a possibility of getting higher returns as compared to NPS. This calculation is based on an 11 percent return.

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