How does PPF score over NSC?
In a way, both are competing investments, which offer a lumpsum on maturity, an identical return of 11 per cent compounded annually, and a tax rebate. So what should be the determining factor? Tenure of the investment and tax on interest earned. Since interest earned on PPF is totally exempt from tax under Section 10 of the Income Tax Act, it scores over NSC where section 80L is applicable. That brings us to tenure. If you are looking at a short-term investment or if you are saving for a particular goal six or seven years down the road, then opt for NSC which has a maturity period of 6 years. If a long-term investment is what you have in mind, go in for the PPF. Fairly inconsistent with your savings? Opt for PPF. It will force you to keep some amount of money aside every year for 15 years (assuming that you go way above the minimum, which is as low as Rs 100). If you are a spendthrift, then maybe you should just go and buy yourself an NSC certificate before you spend the money (here, t
