If you've been researching where to park your long-term savings, you've probably run into all three of these names within the same afternoon: PPF, NPS, and Sukanya Samriddhi Yojana (SSY). They get grouped together because all three are government-backed, all three come with tax breaks, and all three ask you to lock your money away for years, not months. But they're built for different jobs, and the differences show up clearly once you put real numbers next to them.

This guide compares PPF, NPS, and SSY on returns, lock-in periods, and tax treatment, using a worked example of ₹1 lakh invested every year for 15 years. If you want to run your own numbers, our PPF calculator does the math for any deposit amount and tenure.

PPF vs NPS vs Sukanya Samriddhi: Quick Comparison

Comparing NPS vs PPF starts with one basic split: PPF gives you a fixed, government-declared interest rate, while NPS returns depend on how the market performs. Sukanya Samriddhi sits closer to PPF, since it also pays a fixed rate set by the government, but it's built specifically for a girl child's education or marriage expenses rather than general retirement or long-term savings.

The Public Provident Fund (PPF) is a savings scheme open to any resident Indian, with a 15-year term and a rate reviewed every quarter by the Ministry of Finance. For the July-September 2026 quarter, PPF pays 7.1% per annum, compounded yearly.

The National Pension System (NPS) is a retirement scheme regulated by the Pension Fund Regulatory and Development Authority (PFRDA). Your contributions go into a mix of equity, corporate bonds, and government securities, so the return isn't fixed. It depends on which fund manager and asset mix you choose, and it can go up or down with the market.

Sukanya Samriddhi Yojana is restricted to parents or legal guardians of a girl child who is under 10 years old at the time the account is opened. It pays 8.2% per annum for the July-September 2026 quarter, and the account is meant to fund the child's higher education or wedding costs.

One eligibility point worth flagging upfront: NRIs can open and contribute to an NPS account, but they cannot open a new PPF or Sukanya Samriddhi account. An NRI who already holds a PPF account opened while a resident can continue contributing until maturity under specific conditions, but generally cannot extend it further the way a resident account holder can.

Each of these is worth a closer look, since "fixed vs market-linked" and "15 years vs age 60" mean very different things depending on what you're actually saving for.

Returns: Fixed vs Market-Linked

Running the same ₹1 lakh a year through a PPF SIP calculator and an NPS calculator side by side shows just how differently these two schemes grow money. PPF's return is locked in every quarter and never depends on stock market movements. NPS's return depends entirely on how its underlying equity and debt funds perform, which means it can beat PPF by a wide margin in good years and underperform it in bad ones.

Take ₹1,00,000 invested at the start of each year for 15 years.

In PPF, at 7.1% per annum compounded yearly, that grows to roughly ₹27.12 lakh. You'd have put in ₹15 lakh across 15 years, so the interest earned works out to about ₹12.12 lakh.

In Sukanya Samriddhi, at 8.2% per annum over the same 15-year deposit period, the corpus reaches roughly ₹29.81 lakh, or about ₹14.81 lakh in interest on the same ₹15 lakh invested. Unlike PPF, though, an SSY account doesn't mature at 15 years. Deposits stop then, but the balance keeps earning interest until the account matures 21 years after it was opened, so the actual maturity value ends up higher than this 15-year snapshot.

NPS doesn't have a declared rate, so any projection is illustrative rather than a promise. If you assume an average annual return of 10% (a common planning assumption, not a guarantee), the same ₹1 lakh a year would grow to roughly ₹34.95 lakh over 15 years, or about ₹19.95 lakh in growth on ₹15 lakh invested. A bad run of markets in the years before you need the money could easily push this below the PPF or SSY figures. You can plug your own assumed return into our SIP calculator to see how sensitive the outcome is to that one number.

Two mechanical details explain part of the gap. PPF interest is calculated monthly on the lowest balance between the 5th and the last day of that month, but credited only once a year, so depositing early in the financial year (rather than in March) captures a full year of interest instead of a partial one. NPS, by contrast, lets you choose between "Active Choice," where you set your own split across equity, corporate bonds, and government securities up to a permitted equity cap, and "Auto Choice," where the equity share reduces automatically as you approach retirement age. That underlying asset mix, not a declared government rate, is what actually drives your NPS return in any given year.

Lock-In and Liquidity Differences

A PPF calculator SIP-style projection only tells half the story, because the real difference between these three schemes is how easily you can get your money out before the finish line. PPF has a 15-year lock-in, extendable in blocks of 5 years after that. Partial withdrawals are allowed from the 7th financial year onward, subject to a formula set out in the PPF Scheme, 2019.

NPS is built to lock money away until age 60. Exiting earlier than that has historically meant taking only 20% as a lump sum, with at least 80% going into an annuity. The PFRDA's 2025 amendment to the NPS exit and withdrawal regulations has loosened this considerably for many non-government subscribers, allowing a larger lump-sum share and removing the earlier minimum lock-in on some premature exits. Even so, NPS remains the least liquid of the three by design.

On PPF specifically, the partial withdrawal amount is capped at whichever is lower: 50% of the balance at the end of the 4th year preceding the withdrawal year, or 50% of the balance at the end of the immediately preceding year. Only one withdrawal is allowed per financial year. Premature closure of the entire account, before the 15-year term ends, is permitted after 5 years only for specific reasons such as a serious medical condition or higher education, and typically comes with a 1 percentage point reduction on the interest already credited.

Sukanya Samriddhi sits in between. Deposits are required for 15 years, and the account matures 21 years after opening (or on the girl's marriage after she turns 18, if earlier). A partial withdrawal of up to 50% of the balance is permitted once she turns 18, for education or marriage expenses, on submission of proof such as an admission confirmation or marriage invitation, along with the required application form.

If there's a real chance you'll need this money before your target date, that alone may rule out NPS or push you toward PPF instead.

Tax Treatment Compared (EEE vs EET)

Where a sip PPF calculator projection genuinely undersells NPS is on the deposit side: NPS offers a tax deduction that PPF and SSY can't match, even though the two fixed-rate schemes win on the exit side.

PPF and Sukanya Samriddhi both follow the EEE structure: Exempt, Exempt, Exempt. Your deposit qualifies for a deduction under Section 80C (within the overall ₹1.5 lakh limit for that section), the interest earned each year is exempt from tax, and the maturity amount is also tax-free.

NPS works differently. Your own contribution is deductible under Section 80CCD(1), within the same ₹1.5 lakh 80C ceiling, and you can claim an additional ₹50,000 under Section 80CCD(1B), which sits outside that ceiling. This extra deduction is available only under the old tax regime. If your employer contributes to your NPS account, that amount is separately deductible under Section 80CCD(2), in both tax regimes, up to prescribed limits. At withdrawal, only up to 60% of the corpus is tax-free under Section 10(12A) of the Income Tax Act, 1961. The portion used to buy an annuity isn't taxed at the time of purchase, but every pension payment you later receive from that annuity is taxed as income at your slab rate.

Unlike the Section 80CCD(1B) deduction, the employer-contribution benefit under Section 80CCD(2) is available under both the old and new tax regimes, which makes it one of the few NPS-related benefits that isn't tied to giving up new-regime slab rates elsewhere.

It's also worth remembering that the Section 80C deduction behind PPF and Sukanya Samriddhi deposits, and the Section 80CCD(1B) deduction behind the extra NPS contribution, are both available only if you file under the old tax regime. Choosing the new regime for its lower slab rates means giving up these deposit-side deductions entirely, on all three schemes, even though the schemes themselves keep running and paying interest exactly as before.

In short: NPS can reduce your tax bill by more each year while you're contributing, but a chunk of what comes out at the end is taxed eventually, either as a lump sum above the exempt limit or as pension income. PPF and SSY tax you nothing on the way out.

Which One Should You Pick First?

There's no single right answer here, an rd and sip calculator comparison will tell you the same thing a PPF or NPS calculator does: the best choice depends on the goal, not just the return.

If the money is for a girl child's education or wedding and you have 15-21 years to plan for it, Sukanya Samriddhi's higher fixed rate and purpose-built structure make it a natural first stop, assuming you're eligible to open one.

If you want a safe, tax-free, government-backed option for general long-term goals with no eligibility restrictions, PPF is the simpler and more liquid of the two fixed-rate schemes.

If retirement is specifically the goal, and you've already maxed out your Section 80C deduction, NPS is worth adding for the extra ₹50,000 deduction under Section 80CCD(1B) and for exposure to market-linked growth, understanding that part of the eventual payout is locked into an annuity and taxed as pension income later.

A useful first question is simply: what year does this money need to be available? If the answer is a specific milestone like a daughter's college admission or wedding, SSY's structure matches that goal directly. If the answer is "whenever I retire," NPS's lock-in until 60 is not a drawback so much as the point of the scheme. If the answer is somewhere in between, or genuinely unclear, PPF's shorter, extendable 15-year term keeps more options open.

Many households end up using more than one of these for different goals rather than treating it as a single either-or decision, splitting contributions across schemes so that each pool of money is tied to the goal it actually needs to fund.

FAQs

Is PPF better than NPS for a risk-averse saver?

For a saver who wants certainty over growth, PPF is generally the more conservative choice, since its rate is fixed and reviewed quarterly by the government, and the entire maturity amount is tax-free. NPS returns depend on market performance and can be volatile in the short term, though they may also outperform PPF over a long enough horizon.

Which has better tax benefits: PPF or NPS?

It depends on which stage you're looking at. NPS offers a larger upfront deduction, since it stacks an extra ₹50,000 under Section 80CCD(1B) on top of the ₹1.5 lakh Section 80C limit. PPF's advantage is on the exit side: the entire maturity amount is tax-free, while NPS taxes part of the payout eventually.

Can I invest in PPF, NPS, and Sukanya Samriddhi at the same time?

Yes. There's no rule preventing you from holding all three, provided you meet the eligibility criteria for each, such as having a girl child under 10 for Sukanya Samriddhi. Each scheme has its own contribution limit, so combining them is a common way to spread savings across different goals and time horizons.

Which one has the shortest lock-in period?

PPF has the shortest formal maturity period at 15 years, though it's commonly extended in 5-year blocks. Sukanya Samriddhi runs longer, maturing 21 years after the account is opened. NPS is the longest and least flexible of the three, since it's generally locked until age 60 regardless of when you started contributing.

Is This Right For You?

The figures above are general illustrations, not a recommendation for your specific situation. If your employer already contributes to an NPS account on your behalf, if you're weighing a large lump sum across all three schemes at once, or if you're an NRI checking eligibility, the rules get more specific than this guide can cover. In those cases, it's worth checking your numbers with a chartered accountant or a SEBI-registered financial advisor before committing funds.

Conclusion

PPF, NPS, and Sukanya Samriddhi are all backed by the government and all reward long-term patience, but they aren't interchangeable. PPF is the flexible, tax-free default for general savings. Sukanya Samriddhi pays more but is locked to a specific purpose and a specific eligibility window. NPS trades certainty for a bigger tax deduction today and a shot at higher market-linked growth, with more of the payout taxed later.

Run your own numbers before deciding. Our PPF calculator lets you test different deposit amounts and tenures, and pairs well with the PPF calculator guide if you want a deeper walkthrough of how PPF interest is actually calculated month to month.