RETIREMENT
PPF, EPF and NPS: How the Three Retirement Accounts Compare
All three are built for long-term saving and all three reward leaving the money alone. They differ in who sets the return, how much of it is guaranteed, and how easily you can get at your money.
Three different kinds of return
PPF pays an interest rate the government sets and reviews every quarter. EPF pays a rate declared once a year, which was 8.25% for FY 2025-26. NPS has no fixed rate at all. Your money is invested in a mix of equity, corporate bonds and government securities that you choose, and the return is whatever those investments earn.
That one difference shapes everything else. PPF and EPF behave like savings accounts with a long lock-in, steady and predictable. NPS behaves like a retirement fund, with more room to grow and years when it can fall.
Who can open each one
EPF comes with salaried jobs at establishments the scheme covers. You do not choose to join, and both you and your employer contribute. PPF can be opened by any resident individual at a post office or bank, salaried or not. NPS is open to most citizens, and some employers pay into it for their staff.
Lock-in and access
- A PPF account runs for 15 full financial years and can then be extended in five-year blocks. Partial withdrawals are allowed from the seventh year, and you can borrow against the balance in earlier years.
- EPF is meant to be drawn at retirement. Partial withdrawals are allowed for purposes such as buying a house, medical treatment or a child's education or marriage, and the full balance can be taken after a long enough spell out of work.
- NPS locks the main account until 60. At exit, part of the corpus has to buy an annuity that pays a pension, and the rest can be taken as a lump sum. The split has been revised over the years, so check the rules in force when you plan to leave.
How tax treats each
Under the old regime, PPF deposits and your own EPF contributions count towards section 80C, and NPS adds a separate deduction for your own contributions under 80CCD(1B). Under the new regime those deductions are gone, although your employer's contribution to NPS can still be deducted.
On the way out, PPF interest and the maturity amount are tax-free. EPF withdrawals are tax-free after five years of continuous service, but interest on employee contributions above a yearly limit is taxed as it builds up. With NPS, the lump sum at 60 is tax-free up to the share the rules allow, and the annuity pension is taxed as income every year.
What each can grow to
Three illustrations, each worked out with the calculators on this site:
- PPF with ₹1.5 lakh deposited at the start of every year at 7.1% grows to ₹40,68,209 after 15 years. Extended with deposits to 25 years it reaches ₹1,03,08,015, of which ₹37.5 lakh is money you put in.
- EPF on a ₹50,000 basic salary rising 7% a year, starting from a ₹2 lakh balance, with 12% contributed by each side and ₹1,250 a month going to the pension scheme, reaches ₹2,21,32,426 after 25 years at 8.25%.
- NPS with ₹5,000 a month, raised by 5% each year, reaches ₹1,00,39,541 after 25 years if the investments average 10%. At an 8% average it would be ₹75,08,134, and no rate is promised either way.
The EPF figure is the largest mostly because contributions grow with salary and the employer adds money on top, not because its rate is far higher.
How people usually combine them
For a salaried employee, EPF is already happening and forms the steady core of retirement saving. PPF suits money you want guaranteed and tax-free, and it is the natural choice for self-employed people who have no EPF. NPS adds equity for a long horizon and, under the old regime, an extra deduction.
The useful question is how much of your retirement money you want guaranteed and how much you want invested for growth. EPF and PPF cover the first part and NPS the second. Start from what you will need: the retirement corpus calculator works out the target, and the PPF, EPF and NPS calculators show how far each account takes you towards it.