EPF vs NPS vs PPF: What ₹10,000 a Month Becomes in 25 Years

By Apurva Singhi, CFP^®, Founder, House of Financial Planners

A question I hear in almost every batch, and from almost every investor who walks into my office: “Sir, EPF, NPS, PPF, sab retirement ke liye hi hain na? Which one is best?”

All three are long-term, government-framed and tax-favoured, which is exactly why people treat them as interchangeable. They are not. EPF pays a declared rate on your salary deductions, NPS is a market-linked pension account, and PPF is a small savings scheme you run yourself. They differ on the rate, on who carries the risk, on the tax at exit, and on when you can touch the money.

So instead of trading adjectives, we will push the same ₹10,000 a month through each of them for 25 years and see what comes out at the other end. Every rate below was checked against official or primary reporting this week, and the full list sits at the end.

The rates we are working with

EPF is at 8.25 percent for FY 2025-26. The EPFO’s Central Board of Trustees, meeting on 2 March 2026, recommended retaining 8.25 percent for 2025-26, the third year in a row at that rate. The rate is declared each year after the financial year ends, and it can change.

PPF is at 7.1 percent for October to December 2026. Small savings rates are notified every quarter by the Finance Ministry, and the memorandum dated 30 September 2026 kept PPF where it was. Four reviews a year also means four chances for it to move.

NPS has no declared rate at all. Your money buys units in pension fund schemes, and the return is whatever the market gives. For context, the 10-year returns of NPS Scheme E (equity, Tier I) across pension fund managers ranged from 11.61 percent to 12.98 percent as of 25 August 2026, per NPS Trust data. Debt-oriented schemes have earned less. For the worked example I will assume 10 percent a year for a mixed equity-debt allocation. That is an assumption for illustration, not a promise, and further down I show what the same sum looks like at 9 percent and at 11 percent.

The assumptions behind the arithmetic

The same ₹10,000 goes in before the 5th of every month, for 300 months. Total invested in each case: ₹30,00,000.

The caveats, said once. I am holding today’s rates constant for 25 years, which will certainly be wrong in detail; the point here is comparison, not prophecy. “EPF” in this piece means the employee-side money that flows through your payroll, that is, your regular deduction plus VPF topping it up to ₹10,000, so the employer’s share and the EPS pension piece sit outside the comparison. And PPF matures in 15 years, so a 25-year run needs two five-year extensions with deposits, which the scheme allows.

One note on method. EPF and PPF both credit interest once a year, though it accrues on monthly balances. For both I use the same two-step model you can rebuild in a spreadsheet: work out what one year’s deposits are worth at that year’s end, then compound that block annually.

PPF: ₹10,000 a month at 7.1 percent

Step one, the deposit year. Money deposited before the 5th earns from that month itself. The first deposit of the year earns for 12 months, the next for 11, and so on down to 1. That is 12 + 11 + … + 1 = 78 month-units of interest on ₹10,000 each.

Interest in year one = 10,000 × (0.071 ÷ 12) × 78 = 10,000 × 0.0059167 × 78 = ₹4,615

So each year’s ₹1,20,000 of deposits is worth ₹1,24,615 at the end of its own year.

Step two, compound 25 such blocks at 7.1 percent. The future value of ₹1 a year for 25 years at 7.1 percent is (1.071²⁵ − 1) ÷ 0.071. Since 1.071²⁵ = 5.556, the factor is 4.556 ÷ 0.071 = 64.16.

Corpus = 1,24,615 × 64.16 ≈ ₹79,95,800

Call it ₹80 lakh. Your own money is ₹30 lakh of that, and roughly ₹50 lakh is interest. All of it tax free.

EPF: the same money at 8.25 percent

Same model, higher rate.

Interest in year one = 10,000 × (0.0825 ÷ 12) × 78 = ₹5,363, so each year’s block is worth ₹1,25,363.

Compounding factor: 1.0825²⁵ = 7.256, so (7.256 − 1) ÷ 0.0825 = 75.83.

Corpus = 1,25,363 × 75.83 ≈ ₹95,06,300

About ₹95 lakh, and the gap with PPF is worth staring at. Subtract: 95,06,300 minus 79,95,800 is ₹15,10,500 of difference on an identical ₹30 lakh of deposits, produced by a rate gap of 1.15 percentage points. When students ask me why planners fuss over half a percent here and there, this is the slide I show them. If a generic SIP calculator hands you a few lakh more than my figure, that is because it compounds monthly. EPF credits interest annually.

NPS: the same money at an assumed 10 percent

NPS units are priced daily, so the ordinary SIP formula fits. With a monthly rate of 0.10 ÷ 12 = 0.008333:

Corpus = 10,000 × [(1.008333³⁰⁰ − 1) ÷ 0.008333] = 10,000 × [(12.057 − 1) ÷ 0.008333] = 10,000 × 1,326.85 ≈ ₹1,32,68,500

About ₹1.33 crore. Drop the assumption to 9 percent and the same deposits give you about ₹1,12,11,400. Push it to 11 percent and you get about ₹1,57,61,000. One percentage point of assumption moves the answer by ₹20 to 25 lakh, which is more than the entire EPF-versus-PPF gap we just calculated. That is why I keep calling 10 percent an assumption and not a forecast.

NPS also carries a structural condition the other two do not. At 60 you may take at most 60 percent as a lump sum, and a minimum of 40 percent must buy an annuity that pays you a monthly pension. On our number, 60 percent of ₹1,32,68,500 is ₹79,61,100 in your hand, and at least ₹53,07,400 goes into the annuity. The pension that annuity pays is taxed at your slab.

The three side by side

Tax at each stage

Planners read any investment at three stages: when money goes in, while it grows, and when it comes out. E for exempt, T for taxed.

EPF and PPF are the classic EEE products. NPS is usually called EET, because the corpus itself escapes tax but the pension from the mandatory annuity is taxable income for the rest of your life. So part of that ₹1.33 crore, specifically whatever the ₹53,07,400 annuity pays out month after month, is really pre-tax money.

Two fine-print points are worth flagging. Since FY 2021-22, interest on your own EPF contributions above ₹2.5 lakh a year is taxable, with 10 percent TDS. At ₹1,20,000 a year our example is nowhere near that ceiling, but a high earner running a large VPF should keep an eye on it. The second point is the regime. Under the new tax regime, which is now the default, none of the three gets a deduction for your own contribution, and the only entry-stage benefit left standing is the employer’s NPS contribution under 80CCD(2). The growth and exit exemptions survive in both regimes. From FY 2026-27 the Income-tax Act, 2025 renumbers these sections (80C becomes section 123, for instance) without changing the benefits, and I have kept the familiar numbers here. For the regime decision itself, see our old vs new regime workings.

When you can actually touch the money

The three stop resembling each other here.

EPF is employment-linked. The full balance comes out at retirement, or after two months of unemployment. Partial withdrawals became much easier after the CBT’s 13 October 2025 decision: thirteen separate provisions were merged into three categories (essential needs, housing, special circumstances), the minimum service requirement dropped to 12 months, and you can draw up to 100 percent of the eligible balance, subject to keeping 25 percent of contributions in the account at all times. One tax trap sits in here. Withdraw with less than five years of continuous service and the amount becomes taxable.

PPF runs on a fixed timetable that cares nothing for your circumstances. A loan is available roughly between the third and fifth year, capped at 25 percent of the balance two years prior and repayable in 36 months. Partial withdrawal opens only after five full years from the end of the opening year, capped at 50 percent of the balance at the end of the fourth preceding year or the previous year, whichever is lower. Premature closure is allowed after five years only for serious illness, higher education or a change in residency status, and it costs you one percentage point of interest across the whole tenure.

NPS Tier I is the strictest of the three, and deliberately so. Partial withdrawals are capped at 25 percent of your own contributions, not of the grown value, at most three times ever, only after three years, and only for listed purposes such as children’s education or marriage, a first house, or specified illnesses. Put our numbers into that rule and you see how little it gives you: even if the full ₹30,00,000 of contributions is in by then, the ceiling is ₹7,50,000 against a corpus of about ₹1.33 crore. Exit before 60 is possible after five years, but then only 20 percent comes to you and 80 percent must buy the annuity, though a corpus up to ₹2.5 lakh can be taken in full. At 60, full withdrawal with no annuity at all is allowed only if the corpus is ₹5 lakh or less.

How I would think about choosing

The mistake I correct most often, in class and across the table, is comparing 8.25 against 10 as if they were the same kind of number. EPF’s 8.25 is a declared rate on a sovereign-backed scheme. NPS’s 10 is my assumption about future markets, with decent historical support behind it and no commitment underneath it. Our piece on retirement corpus maths explains why that distinction matters more as the corpus grows.

My own view: for a salaried person this was never an either-or. EPF arrives by default and is the finest forced-saving machine in the country. If you want more of it, VPF through payroll beats any debt product an advisor can sell you, and I say that as a practising mutual fund distributor who earns nothing when you choose it. PPF is the self-employed person’s substitute for EPF, and a sound home for the debt side of anyone’s allocation, with the bonus that the balance is protected from attachment by creditors. NPS earns its place when an employer contributes under 80CCD(2), which is close to free money, or when you genuinely want equity exposure locked away from your own worst instincts until 60.

A warning before anyone acts on the table above. If there is a real chance you will need this money before 60, for a business or a house, NPS is the wrong vehicle for that rupee, whatever the corpus column says. The same lock-in that protects a retirement corpus punishes a goal that arrives at 45.

If you want to do something with this article rather than only read it, keep your salary slip and your statements in front of you and check four things. What is your own monthly EPF deduction today, and how much VPF would it take to reach ₹10,000. Whether your PPF deposit is actually reaching the account before the 5th, because on ₹1,20,000 a year that timing alone is the ₹4,615 of interest we calculated in year one. Whether your employer offers the 80CCD(2) route, up to 14 percent of basic plus DA, since that is the only contribution-stage benefit left in the new regime. And, if you are a high earner, where your own EPF and VPF interest stands against the ₹2.5 lakh line.

Reading a product this way, entry to growth to exit, then risk and liquidity, is the core skill taught in the retirement and tax planning module of the CFP curriculum, which we teach at House of Financial Planners in Ahmedabad. If working through this article felt natural, the field may suit you.

Frequently asked questions

Can I actually put ₹10,000 a month into each of these?

PPF accepts between ₹500 and ₹1,50,000 a financial year, so ₹10,000 a month (₹1,20,000 a year) fits with room to spare. In EPF your statutory deduction depends on salary, but VPF lets you voluntarily raise your own contribution through payroll. NPS Tier I takes voluntary contributions directly, so ₹10,000 a month is straightforward there.

Why does NPS show the biggest corpus if its return is not guaranteed?

Because the example assumes 10 percent against EPF’s 8.25 and PPF’s 7.1, and over 300 months compounding turns small rate gaps into lakhs. The assumption is grounded in history, with NPS equity schemes earning 11.6 to 13 percent over the ten years to August 2026, but a weak market decade could leave NPS behind EPF. You are being paid that potential premium for carrying the risk.

Is the 60 percent NPS lump sum really tax free?

Yes. On normal exit at 60 or superannuation, the lump sum withdrawal of up to 60 percent of the corpus is exempt, and the amount used to buy the annuity is not taxed at purchase either. What is taxed is the monthly pension the annuity then pays, at your slab rate, every year.

What is the ₹2.5 lakh EPF interest rule?

Interest earned on your own EPF and VPF contributions above ₹2.5 lakh in a financial year is taxable as income from other sources, and EPFO deducts 10 percent TDS on it. At ₹1,20,000 a year our example is unaffected. The limit applies to the employee’s share only, not the employer’s contribution.

Will PPF really pay 7.1 percent for 25 years?

Nobody can promise that. The rate is notified every quarter by the Finance Ministry and has been left at 7.1 percent for a long stretch, but it can move either way with interest rate cycles. The same applies to EPF’s yearly declaration. Long-term projections at today’s rates are planning estimates, not contracts.

Which of the three helps me under the new tax regime?

At the contribution stage, only the employer’s NPS contribution under section 80CCD(2), up to 14 percent of basic plus DA, reduces taxable salary in the new regime. Your own EPF, VPF, PPF and NPS contributions get no deduction there. The exemptions on growth and on exit continue under both regimes, so the products remain attractive even without the entry-stage benefit.

Sources

• EPF rate for FY 2025-26 retained at 8.25 percent, CBT meeting of 2 March 2026: CAalley / PTI report and Upstox report
• PPF at 7.1 percent for October to December 2026, Finance Ministry memorandum dated 30 September 2026: inkl news report
• NPS Scheme E Tier I 10-year returns by pension fund manager, NPS Trust data as of 25 August 2026: Upstox report; scheme-wise archives at NPS Trust
• NPS exit, premature exit and partial withdrawal rules: PFRDA FAQ, Exit from NPS for All Citizen Model
• Tax exemption on the 60 percent lump sum and annuity purchase: NPS Trust, Systematic Lump Sum Withdrawal FAQ
• EPFO liberalised partial withdrawal rules, CBT decision of 13 October 2025: Business Standard
• Taxability of EPF interest on employee contributions above ₹2.5 lakh: Business Standard explainer
• PPF Scheme 2019 deposit limits, loan, withdrawal, extension and premature closure rules: Taxguru analysis of the PPF Scheme, 2019
• Employer NPS deduction under 80CCD(2) at 14 percent in the new regime: HDFC Pension
• Section renumbering under the Income-tax Act, 2025, effective 1 April 2026: Business Today