Have you ever been to an eye specialist? If it is a yes, then you know from experience how he checks your eyesight. Then you choose the right spectacles. But what if you are confused between two frames?

The same situation applies when you choose a retirement plan. National Pension System or PPF: which is best for you? Before you draw any conclusions, it’s always better to view and compare them. Let’s discuss the National Pension System first.

Understanding the frame of the National Pension System

The National Pension System, a well-established government-sponsored pension program, offers a wide range of benefits to employees across various sectors, excluding the armed forces. This inclusive initiative extends its reach to individuals working in the public, private, and unorganised sectors.

Within this particular scheme, individuals who possess an account have the opportunity to consistently allocate funds towards a pension account throughout the duration of their employment. After reaching retirement age, individuals who hold accounts have the opportunity to access a specific portion of their accumulated funds as a lump sum payment. The remaining balance can then be utilised as a regular pension, ensuring a steady income throughout their retirement years. ​​

While PPF (Public Provident Fund) is also backed by the government, it has a long-term investment perspective. In order to achieve optimal outcomes, it is important to maintain a long-term commitment to the scheme for a period of 15 years.

But what is the difference between NPS and PPF? Before you finalise the right frame or colour of it, you need to be clear about your face type—is it long, oval, round, etc.? Then,  will it suit your personality? You cannot keep changing the frames every single day. Then, you might also think of a particular colour for the frame.

So, let’s discuss: who can invest in NPS? The NPS is open to any citizen of India who is between 18 and 60 years old on the date of submission of their application. While in PPF, the account holder would need to comply with the Know Your Customer (KYC) norms and should not be an undischarged insolvent or of an unsound mind.

When selecting the right frame, make sure the frames fit at the bridge of your nose. This is one of the most crucial factors to consider when choosing frames for your lifestyle. Your glasses will stay on better as a result. You need to understand the features of a frame before choosing the final one. What about the features of NPS and PPF? Let’s discuss the same briefly.

Key Features of NPS compared to PPF

Who can invest in NPS? An NPS account can be opened by Indian citizens above 18 years of age and less than 60 years of age, while in PPF, any citizen of India can open a PPF account. But in NPS, an NRI too can open an account; this is not the case with PPF.

Interest rates: in NPS, you’ll get around 12–14% interest, while in PPF, you only get around 7-8%.

Maturity period: In 15 years, a PPF account matures. After 15 years, this term may also be extended by a block of five years with 7-8 or without further contributions. The maturity period is flexible. The NPS account allows for contributions up until the age of 60, with the option to continue investing until the age of 70.

Investment Limited: The NPS requires a minimum contribution of ₹6,000. There is no cap on contributions as long as they don’t go over 10% of your gross annual income or 10% of your gross total income if you work for yourself. Whereas in PPF, you can contribute a minimum of ₹500 per year, with a ₹1,50,000 limit on the total. There can be a maximum of 12 contributions per year.

Tax Benefits: Only ₹1.5 lakh under Section 80CCD(1) of the Income Tax Act and an additional ₹50,000 under Section 80CCD(2), for a maximum of ₹2 lakh, are eligible for tax benefits under NPS. Under Section 80C, every PPF deposit is tax-deductible.

Conclusion

If you know your face shape, choose the right colours, take your lifestyle into account, and go with what makes you feel the happiest and most comfortable, finding the right frames will be simple. The same implies choosing between NPS and PPF. You need to know the benefits of each option before investing.

Are you tired of feeling unsure about your financial future? It’s time to take control and start planning for a secure retirement. And that’s where India’s National Pension System (NPS) comes in!

I know, the thought of saving for retirement may seem far off in the distant future. But trust me, it’ll be here before you know it. And the earlier you start, the better off you’ll be.

Why NPS?

So, why should you consider investing in the NPS? Here are a few reasons:

Affordability

NPS has a low entry barrier and low contribution requirements, making it an attractive option for millennials who are just starting out in their careers and have limited disposable income. You can start with a minimum contribution of Rs. 500 per annum.

Tax Benefits

You can invest in NPS and claim up to 1.5 lakh deduction under 80C.

Voluntary contributions of up to ₹50,000 to NPS Tier I account are deductible under 80CCD (1B).

If you are a corporate model subscriber, you can have up to 10% of your basic salary contributed to your NPS account and claim up to ₹7.5 lakh in deductions under 80CCD (2).

Additionally, NPS comes under EEE category. Exempt for deposits, exempt for returns, and exempt for withdrawal.

Flexibility

NPS offers a range of investment options including equity, debt, and government securities. You can choose the investment mix that aligns with your risk tolerance and financial goals. Furthermore, you have the option to switch between investment options at any time.

Government Backed

The NPS is backed by the Government of India, making it a reliable and secure investment option. Your investment is protected and managed by the Pension Fund Regulatory and Development Authority (PFRDA), ensuring the safety of your funds.

Long-term Savings

NPS is designed for long-term savings, with a minimum investment period of 10 years. By starting early and making regular contributions, you can accumulate a significant corpus by the time you retire.

Portability

With NPS, you can take your savings with you wherever you go. You can transfer your NPS account from one city to another or from one job to another, making it an ideal option for millennials who are likely to change jobs and locations throughout their careers.

Conclusion

So, what are you waiting for? It’s never too early to start planning for your future. By investing in the NPS, you can take control of your financial future and ensure a secure retirement.

Start today and be one step closer to a worry-free tomorrow!