Are you all set to apply for the best saving options in India and confused between the National Savings Certificates (NSC) and Public Provident Fund (PPF)? Don’t worry as this article will easily help you decide which one is the Best Saving Options in India. Before you go ahead and decide which one is better between the NSC and the PPF, you need to know some aspects of both of the best investment options in India.

Public Provident Fund (PPF) and National Savings Certificates (NSC) are smart saving schemes launched by the Indian Government. They are meant to encourage the citizens of India to indulge in investment and saving habits.

 

What is a PPF Account?

PPF stands for Public Provident Fund or the PPF which is a known tax-saving scheme meant for long-term investment such as 15 years. It was started in 1968.

You can earn a higher return while keeping the money invested for a period of 15 years with the maximum amount being Rs.1.5 lakh and the minimum being Rs.500. It is a High return Investment the investors lap up.

Earlier, one can open a Public Provident Fund account only with State Bank of India or other leading banks such as Punjab National Bank or ICICI Bank.

However, with changing times, you can now open a PPF account from the mobile apps of many banks without indulging in a lengthy process.

What is the NSC?

NSC stands for National Savings Certificates, and also one of the best saving options in India which is also an investment tool. The scheme was introduced by the Central Government in 1950. Anyone can start investing in the NSC scheme by visiting any post office within the length and the breadth of the country.

Let’s go ahead and discuss which is better – NSC or the PPF – as per their benefits and features:

Which is better – PPF or NSC?

●NSC Tax Benefits vs PPF Tax Benefits

You need to know that both PPF and NSC can let you enjoy tax benefits under the Section 80C of the Income Tax Act. For availing the tax-benefits, you will need to invest at least an amount not less than Rs.1.5 lakh per fiscal year but there are slight differences such as:

-You can’t add to the original investment in the NSC. If you buy an NSC worth Rs.100, you will need to buy more if you wish to invest more. But the PPF has no such limitations as you can keep a minimum of Rs.500 and a maximum of Rs.1.5 lakh annually

-You can avail a compounding interest return of 8.1%

-The interest gained on NSC is taxable while the PPF’s principal and interest gained are tax-free

●The ROI

The return on investment for NSC is locked at the time of investment of the plan only which means you get only a fixed return. The PPF’s ROI may change as its interest rate are prone to changes. Hence, you may get a fluctuating ROI after the end of the tenor.

●Lock-in Period

Both NSC and PPF have no provisions to allow you to withdraw the invested money, letting it grow during the phase. As of now, the lock-in period for the PPF is 15 years and for NSC, it’s either 5 or 10 years as per the choice of your plan.

●Withdrawal Rules

NSC has no provisions for partial withdrawals and is allowed only if the policyholder dies. With a PPF account, you can withdraw money from the 7th year onwards.

Now that you are aware of the features and benefits of NSC and PPF, you can easily decide for high return investment in india, which one to opt for depending upon your needs, goals and income.

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