Popular investment options for retirement in India - EPF, PPF, and NPS - which one is better for you? EPF is for salaried employees, PPF is for all citizens, while NPS is market-based.
When individuals plan for retirement, the question arises: where should they invest their money? In our country, EPF (Employees' Provident Fund), PPF (Public Provident Fund), and NPS (National Pension System) are the three most popular investment options. While all three are not only safe but also linked to government schemes, their returns, tax benefits, and maturity rules differ significantly. Therefore, it's important to know which of these three to invest in. Today's article is devoted to this topic. In this article, we'll tell you where to invest between EPF, PPF, and NPS. Let's find out...
Employee Provident Fund (EPF)
This is only for employed individuals. If you are employed, a portion of your salary goes into EPF. Therefore, the interest rate is around 8.15% - 8.25%, which is quite good.
When it comes to tax, it falls under the EEE category (Exempt-Exempt-Exempt), meaning the investment, interest, and maturity are all tax-free. This is ideal for those who want a large sum of money at retirement while simultaneously accumulating necessary savings.
Public Provident Fund (PPF)
PPF is a scheme that can be opened by any Indian citizen, whether employed or a businessman. The interest rate is set by the government every three months, and currently stands at 7.1%. It offers completely safe and guaranteed returns. It is ideal for those who are risk-averse, prefer to save taxes, and want to build a safe fund for the long term.
National Pension System (NPS)
The National Pension System operates as a market-linked retirement scheme. Your money is invested in equity (the stock market) and debt (bonds). Returns are based on market performance, so you can expect a 9% to 12% return over the long term. You should know that at retirement, you can withdraw up to 60% of your savings at once, while 40% must be invested in an annuity, which provides a monthly pension for life.
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