PPF vs EPF vs NPS vs Sukanya Samriddhi: Which to Choose?
Sukanya Samriddhi pays the highest fixed rate (8.2%) but only for a daughter under 10. EPF (8.25% for FY 2024-25) is automatic for salaried employees. PPF (7.1%) is the safe, fully tax-free choice for everyone. NPS is market-linked, so it can grow the most and adds extra tax deductions, but at exit at least 20% (40% for government staff) must buy a pension annuity.
The four schemes at a glance
| Feature | PPF | EPF | NPS | Sukanya Samriddhi |
|---|---|---|---|---|
| Who can open | Any resident individual | Salaried employees at EPF-covered employers | Any Indian citizen 18–70 | Parent/guardian of a girl below 10 |
| Return (as of FY 2025-26) | 7.1% fixed by govt, reviewed quarterly | 8.25% for FY 2024-25, declared yearly | Market-linked | 8.2% fixed by govt, reviewed quarterly |
| Contribution | ₹500 to ₹1,50,000 a year | 12% of basic + DA, plus employer share | Min ₹1,000 a year; no upper limit | ₹250 to ₹1,50,000 a year |
| Lock-in | 15 years, extendable in 5-year blocks | Till retirement/leaving job (partial withdrawals allowed) | Till age 60 (limited exits earlier) | 21 years from opening; deposits for 15 |
| Tax on contribution | 80C (old regime) | 80C (old regime) | 80CCD(1), extra 80CCD(1B); employer share under 80CCD(2) in both regimes | 80C (old regime) |
| Tax on maturity | Exempt | Exempt after 5 years’ service (limits apply) | Lump sum up to 80% (non-govt) or 60% (govt); tax-free up to 60% of corpus; annuity taxable | Exempt |
| Risk | Sovereign | Very low | Market risk | Sovereign |
Rates for PPF and SSY are announced every quarter by the Ministry of Finance (see National Savings Institute). The EPF rate is declared each year by EPFO (epfindia.gov.in). Check the latest notification before you invest; the figures here are as of FY 2025-26.
PPF: the safe, tax-free all-rounder
The Public Provident Fund is a 15-year government-backed account you can open at a post office or bank. You can deposit any amount between ₹500 and ₹1,50,000 a year, in one go or in parts. Interest is calculated monthly on the lowest balance between the 5th and the end of the month and credited once a year, so deposits made by the 5th of the month (ideally by 5 April for the whole year) earn the most.
Example: ₹1,50,000 deposited at the start of every year for 15 years at 7.1% grows to ₹40,68,209 on ₹22.5 lakh invested. Extend for two more 5-year blocks with fresh deposits and the balance after 25 years is ₹1,03,08,015.
Liquidity: loans are allowed from year 3 to year 6, and partial withdrawals from year 7. Because it is fully tax-free (EEE), PPF works for anyone, including self-employed people with no EPF.
Try it: Plan deposits and see the year-wise balance in the PPF Calculator
EPF: the automatic retirement saver
If you are salaried at an EPF-covered employer, you already contribute 12% of basic + DA every month, and your employer adds 12%. Of the employer’s share, 8.33% goes to the Employees’ Pension Scheme (EPS), capped at ₹1,250 a month (8.33% of the ₹15,000 wage ceiling); the rest goes into your EPF account.
Example: with basic + DA of ₹30,000, you put in ₹3,600 a month. Your employer also pays ₹3,600: ₹1,250 to EPS and ₹2,350 to EPF. So ₹5,950 a month goes into EPF. At 8.25%, with no salary increase, the balance after 20 years is about ₹35,09,428 on ₹14,28,000 contributed. Real balances are usually higher because salaries rise.
Tax: withdrawals after 5 years of continuous service are tax-free. Interest on your own contributions above ₹2,50,000 a year (₹5,00,000 if your employer does not contribute) is taxable. You can also put more in through the Voluntary Provident Fund (VPF), which earns the same rate within the same limit. Partial withdrawals are allowed for housing, medical needs, education and marriage, subject to EPFO rules.
Try it: Project your EPF balance with salary hikes in the EPF Calculator
NPS: market-linked pension with extra tax breaks
The National Pension System, regulated by PFRDA, invests your money in a mix of equity, corporate bonds and government securities that you or an auto-choice lifecycle fund chooses. Private-sector subscribers can hold up to 75% in equity under active choice. Costs are among the lowest of any investment product in India.
Exit rules changed in December 2025. Under the PFRDA (Exits and Withdrawals under the NPS) Regulations, last amended on 16 December 2025, non-government subscribers (All Citizen and corporate NPS) must use at least 20% of the corpus to buy an annuity at normal exit and can take up to 80% as a lump sum. Government-sector subscribers still need to annuitise at least 40%. PFRDA’s press release on the key changes summarises the update.
Example (non-government subscriber): ₹5,000 a month for 25 years at an assumed 10% return grows to about ₹66,89,452 on ₹15 lakh invested. At 60 you can take up to 80% (₹53,51,561) as a lump sum and use the minimum 20% (₹13,37,890) to buy an annuity. At an assumed 6% annuity rate, that pays roughly ₹6,689 a month for life, taxed as income.
Tax on the lump sum: Section 10(12A) of the Income-tax Act exempts the lump sum only up to 60% of the corpus (₹40,13,671 here). Unless the Act is amended, treat the extra 20% (₹13,37,890) as taxable income in the year you withdraw it; check the current Income-tax rules before you exit. You can also choose a smaller lump sum and a bigger annuity.
Government-sector subscribers with the same corpus get up to 60% (₹40,13,671) as a tax-free lump sum and must annuitise at least 40% (₹26,75,781), which at 6% pays roughly ₹13,379 a month.
Tax benefits are NPS’s main draw:
- Your own contribution counts under 80CCD(1) within the ₹1,50,000 80C limit, plus an extra ₹50,000 under 80CCD(1B). Both are old-regime only.
- Your employer’s contribution, up to 14% of basic + DA in the new regime (10% in the old regime for private employees), is deductible under 80CCD(2). This is one of the few deductions left in the new regime; our tax regime guide shows its effect.
Try it: Set the minimum annuity to 20% (non-government) or 40% (government) and estimate your corpus and pension with the NPS Calculator
Sukanya Samriddhi: the best fixed rate, for daughters only
Sukanya Samriddhi Yojana (SSY) is for a girl child below 10. A family can open accounts for up to two daughters (three in the case of twins or triplets). You deposit between ₹250 and ₹1,50,000 a year for the first 15 years; the account then keeps earning interest until it matures 21 years after opening. Up to 50% can be withdrawn for higher education once she turns 18 or passes Class 10.
Example: open an account for a newborn and deposit ₹1,50,000 at the start of each year for 15 years at 8.2%. The balance at year 15 is ₹44,75,989, and with no further deposits it grows to ₹71,82,119 by year 21, on ₹22.5 lakh invested. Like PPF, it is fully tax-free.
Try it: Check the maturity value for your daughter’s age in the Sukanya Samriddhi Calculator
Same money, four schemes
Here is ₹1,50,000 a year for 15 years in each scheme (₹12,500 a month for EPF/VPF and NPS, a lump sum at the start of each year for PPF and SSY). The NPS figure uses an assumed 10% return; the others use the current notified rates held constant.
| Scheme | Value after 15 years | Tax at withdrawal |
|---|---|---|
| PPF at 7.1% | ₹40,68,209 | Fully tax-free |
| EPF/VPF at 8.25% | ₹43,38,524 | Tax-free if contributions stay within ₹2,50,000 a year |
| NPS at an assumed 10% | ₹52,24,053 | Up to 60% of corpus tax-free; non-govt subscribers can take up to 80% as lump sum (20% min annuity); annuity income taxable |
| SSY at 8.2% (value at year 15) | ₹44,75,989 | Fully tax-free; keeps earning to year 21 |
Computed in Python. Monthly deposits earn slightly less than year-start deposits at the same rate because each instalment is invested for less time.
NPS can end highest, but it carries market risk and you cannot take it all as cash. SSY offers the best guaranteed rate if you have a daughter. EPF/VPF beats PPF on rate, but is available only to salaried employees.
Which should you pick?
- Salaried, new tax regime: EPF happens automatically. Ask your employer about NPS under 80CCD(2) for a real tax saving. Add PPF for tax-free safe savings.
- Salaried, old tax regime: fill the 80C limit with EPF, then PPF or SSY; add ₹50,000 in NPS under 80CCD(1B) if you are in the 20–30% slab.
- Self-employed: PPF as the safe core, NPS for long-term retirement growth.
- Parents of a girl under 10: SSY is hard to beat for her education and marriage fund.
- Long horizon, comfortable with risk: combine these with equity mutual fund SIPs, covered in our SIP vs lumpsum vs FD guide.
These are not either-or choices. Most families use two or three: EPF by default, PPF or SSY for guaranteed tax-free money, and NPS or equity for growth.
Frequently asked questions
Which is better: PPF, EPF, NPS or Sukanya Samriddhi?
It depends on who you are. SSY gives the highest guaranteed rate but only for a daughter under 10. EPF is best for salaried employees and is automatic. PPF suits everyone who wants safe, tax-free savings. NPS can grow more because it is market-linked and gives extra tax deductions, but at exit at least 20% (40% for government-sector subscribers) must buy an annuity.
What is the current PPF and Sukanya Samriddhi interest rate?
As of FY 2025-26, PPF earns 7.1% and Sukanya Samriddhi 8.2% a year. The government reviews these rates every quarter, so check the latest notification from the National Savings Institute or the Ministry of Finance.
How much will I get if I invest 1.5 lakh a year in PPF for 15 years?
At 7.1%, depositing ₹1.5 lakh at the start of each year for 15 years gives about ₹40,68,209 on ₹22.5 lakh invested, fully tax-free.
Can I invest in both PPF and EPF?
Yes. They are separate accounts. In the old tax regime, your EPF and PPF contributions together count towards the same ₹1.5 lakh Section 80C limit.
Is NPS better than PPF?
NPS has higher growth potential because it can invest up to 75% in equity, and it offers an extra ₹50,000 deduction under 80CCD(1B) in the old regime. PPF is guaranteed, fully tax-free and more flexible. Many investors use PPF for safety and NPS for long-term retirement growth.
How much of NPS can I withdraw as a lump sum at 60?
Under the PFRDA exit regulations as amended on 16 December 2025, non-government subscribers can take up to 80% as a lump sum and must buy an annuity with at least 20%. Government-sector subscribers can take up to 60% and must annuitise at least 40%. Only the lump sum up to 60% of the corpus is tax-free under Section 10(12A); check the current Income-tax rules for the rest.
Is EPF interest taxable?
Interest is tax-free on contributions up to ₹2.5 lakh a year (₹5 lakh if the employer does not contribute). Interest on employee contributions above that limit is taxable. Withdrawals before 5 years of continuous service can also be taxable.
Related guides
- SIP vs Lumpsum vs FD: Which Grows Money Faster?
- New vs Old Tax Regime FY 2025-26: Which Saves More?
- CTC vs In-Hand Salary: How to Calculate Take-Home Pay
- How Gratuity Is Calculated (Formula, Examples, Tax)
This guide is general information, not financial or tax advice. Interest rates and rules are as of FY 2025-26 and change; check the latest notifications from the Ministry of Finance, EPFO and PFRDA.