National Savings Certificate vs Public Provident Fund: Which scheme offers better returns?

When it comes to safe investment options, many still prefer post office savings schemes. Among these, the National Savings Certificate (NSC) Scheme and Public Provident Fund (PPF) Scheme from the post office stand out. We'll dive into these schemes, providing details about interest rates and helping you decide which one suits you better.

National Saving Certificate: NSC is a fixed income savings scheme available for 5 years through post offices. You can invest any amount from Rs 1,000 in multiples of 100, with no upper limit. As of July 1, 2023, the interest rate has risen to 7.7 percent. Purchasing an NSC involves visiting a nearby post office, depositing the chosen amount, and receiving the certificate. This scheme can be availed by single or joint accounts for up to three people. It also offers a rebate of Rs 1.50 lakh under Section 80C of Income Tax.

Public Provident Fund: PPF is a government-backed long-term savings scheme. You can invest between Rs 500 and Rs 1.50 lakh annually to build a substantial fund by maturity. The current interest rate for PPF is 7.1 percent. Similar to NSC, PPF also provides a rebate of Rs 1.50 lakh under Section 80C of Income Tax. The maturity period for PPF is 15 years, and you can make partial withdrawals in emergencies after 5 years of investment.

NSC involves a lump-sum investment, providing the full amount after five years. PPF, on the other hand, allows monthly deposits and offers a lump-sum fund after 15 years. PPF is modeled after the Provident Fund and is accessible to all Indian citizens. Additionally, NSC offers higher returns in terms of interest rates.

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