What is the Difference Between NSC and PPF?

What Is a National Savings Certificate?

What Is a Public Provident Fund?

What Is the Difference Between NSC and PPF?

It would be beneficial for you to go through this tabular comparison to develop a clear idea about NSC vs PPF.




Interest Rate

An annual interest rate of 6.8% gets compounded annually on the accrued sum.

PPF account holders currently enjoy an interest of 7.1% per annum on their investments.

Lock-in Period

Lock-in period of the scheme is 5 years.

Lock-in period for a PPF scheme is 15 years.


The interest income under an NSC scheme is taxable.

Both the principal amount and the interests accumulated over the tenure entirely fall under tax exemption.


There is no upper limit to annual investments for an NSC scheme.

You are not eligible to invest more than ₹1.5 lakhs in a year in your PPF account.

Regulatory Body

Post offices solely regulate this centrally backed scheme.

Both banks and post offices across India offer PPF account opening facilities.

What Are the Benefits of Investing in NSC?

What Are the Benefits of Investing in PPF?

Which Is Better NSC or PPF?

FAQs on NSC vs PPF

Is TDS deducted on NSC?

No, TDS is levied on the interest amount credited to a person’s bank account upon investment in NSC. However, if the deposit amount crosses ₹ 1.5 Lakhs within a year, the rest of the investments come under the income tax bracket.

Can I invest lumpsum in NSC?

The NSC demands at least ₹ 1,000 yearly for five years, during which you cannot withdraw the accrued funds. Either you may opt for both monthly deposits as well as lumpsum payments.

Can I withdraw PPF every year?

After your PPF account ages 5 years, you can withdraw accumulated funds once a year. However, this withdrawal sum cannot exceed the account balance recorded at the time of tenure extension after 5 years.

Is there any drawback to PPF investments?

The relatively prolonged lock-in period of 15 years is considered by many to be a disadvantage. Moreover, NRIs and HUFs are not allowed to open any PPF account. Finally, a person can never open more than one PPF account except if they maintain a joint account with a minor.