Whoever said wishes don’t come true hasn’t explored our offers!
  • NPS vs PPF

    Which is better the National Pension Scheme or Public Provident Fund

    Are you facing the dilemma of making an investment in the Public Provident Fund or National Pension Scheme? Many people face the issue of which of these schemes to invest in, to help you in your decision let’s understand the difference between them.

    What is the National Pension Scheme?

    Initiated in the year 2004, by the Government of India the National Pension Scheme, this scheme is available for all citizens of the country, who will require some savings for the life after requirement. The NPS is launched in 2 parts, Tier 1 and Tier 2, under the Tier 1 scheme is meant for all government employees, and will contribute 10% of the basic pay, dearness pay and dearness allowance earned will be added to an NPS account each month and the government will also contribute the same amount as well. For Tier 2 scheme each individual can open an account under this pension scheme and will make contributions to the same, they will not receive additional contributions from the government.

    For Tier 1 accounts:

    • The minimum contribution while opening this account should be at least Rs. 500 and multiples thereof.
    • At the end of the financial year the minimum balance should be a sum of Rs. 6000.
    • And a minimum of 1 contribution should be made in fiscal year.

    For Tier 2 accounts:

    • The minimum contribution while opening this account should be at least Rs. 1000, the smallest contribution should be a minimum of Rs. 250.
    • At the end of the financial year the minimum balance should be a sum of Rs. 2000.
    • And a minimum of 1 contribution should be made in fiscal year.

    What is Public Provident Fund?

    A government small savings scheme, the Public Provident Fund provides security of your investment and also provides high interest rates. A minimum investment of Rs. 500 and a maximum of Rs. 1 lakh per annum, can be made into a PPF account, for a term of 15 years. This investment will now earn you an interest of 8.70% and will be compounded yearly. A PPF account of an individual, will give them a few benefits:

    1. The individual can make small investments, for a long period of time.
    2. The entire amount in a PPF account, inclusive of interest it earns will be tax free, and wealth tax as well will not be charged.
    3. An individual will get a tax rebate as per section 80C of the Income Tax Act of 1961.

    Difference between NPS and PPF:

    Particulars

    NPS

    PPF

    Eligibility

    Indian citizens and NRIs are allowed to open accounts

    Indian citizens only are allowed to open accounts

    Minimum age

    18 to 60 years

    Can be opened even in the name of a minor with either one of the parents as custodians

    Rate of returns

    10.00% to 12.00% and this is dependant on the market situation

    8.60% and is fixed

    Contribution for a year

    Minimum of Rs. 6, 000

    Maximum has no limit

    Minimum of Rs. 500

    Maximum of Rs. 1 lakh

    Tax on contributions

    Contributions made to NPS is deductible from the total income

    Tax free

    All plans and policies you decide to invest in need to be reviewed more than once, as investing your hard earned money is a big decision to make. Checking on factual data, investments for the year, returns you will receive, your income in hand after the investments made. As you are the investor, it is always good to look at your savings as well as your future plans, and what is the intention with which you wish to save your money.

  • reTH65gcmBgCJ7k - pingdom check string.
    reTH65gcmBgCJ7k - pingdom check string.
    This Page is BLOCKED as it is using Iframes.