EPF vs PPF vs NPS: What is the Actual Difference?

EPF, PPF, and NPS are the three pillars of Indian retirement savings. Salaried employees often have all three without fully understanding how each one works. Here is the clear breakdown.

EPF (Employee Provident Fund)

Who gets it: Only salaried employees in companies with 20+ staff. How much: 12% of basic salary deducted, matched 12% by employer (though employer portion partly goes to EPS). Interest: 8.25% for FY 2025-26 (declared by EPFO annually). Lock-in: Until retirement (60). Partial withdrawal allowed for specific reasons (house purchase, marriage, medical). Tax: EEE (exempt-exempt-exempt) up to the cap. Interest on contributions above ₹2.5L/year is now taxable. Key feature: Employer match = effectively 100% return on your portion. No other instrument in India gives you this.

PPF (Public Provident Fund)

Who gets it: Any Indian citizen can open one at a bank or post office. How much: Minimum ₹500/year, maximum ₹1.5L/year. Interest: 7.1% for Q1 FY 2026-27 (reset quarterly by Ministry of Finance). Lock-in: 15 years (with 5-year extension blocks after). Tax: EEE — fully tax-free across contribution, interest, and maturity. Key feature: Sovereign-backed, zero risk. Best place for debt allocation of your portfolio.

NPS (National Pension System)

Who gets it: Any Indian (employee or self-employed) aged 18-70. How much: No upper limit. Tax benefit up to ₹1.5L under 80C + extra ₹50K under 80CCD(1B). Returns: 9-11% depending on equity/debt split you choose. You pick the asset allocation. Lock-in: Until age 60. Tax at maturity: 60% lump sum is tax-free. 40% must be used to buy an annuity (monthly pension for life) — and that annuity income is fully taxable. Key feature: The only retirement product where you control the equity exposure, with low fund management fees (~0.03%).

Side-by-side

| Feature | EPF | PPF | NPS | |---|---|---|---| | Open to | Salaried only | All Indians | All Indians | | Current return | 8.25% | 7.1% | 9-11% | | Risk | None | None | Low-Moderate | | Lock-in | Until 60 | 15 years | Until 60 | | Max contribution | 12% of basic | ₹1.5L/year | No cap | | Tax on maturity | Tax-free (with caps) | Tax-free | 60% free, 40% taxable annuity | | Liquidity | Low | Very low | Very low |

The smart-allocation strategy

For a typical 30-year-old salaried person:

1. Let EPF happen. It is automatic and has the employer match. Don't opt out. 2. Open a PPF account early — the 15-year clock starts from year of opening. Even ₹500 deposits keep the account alive. 3. NPS only for the extra ₹50K 80CCD(1B) deduction. Above that, equity mutual funds beat NPS on flexibility and tax efficiency. 4. ELSS for the remaining 80C. Beats PPF over 15-year horizons.

Calculate maturities

Use our EPF Calculator, PPF Calculator, and NPS Calculator to project real numbers based on your salary and age.