Comparing the Schemes
EPF, PPF, NPS, SSY and FDs side by side on return, lock-in, liquidity and tax — one decision table.
This capstone of the India-instruments module putsThe right to sell the underlying at a set price — a bearish bet. the major schemes side by side. The point isn’t to crown one “best” — it’s to see that each scheme is optimised for a different job, so the right choice depends on your situation and goal.
The unifying insight: there is no single “best” scheme — each wins on a different dimension* (return, safety, liquidityHow easily an asset can be bought or sold without moving its price., tax, eligibility), so you match the scheme to the job the money must do. Compare them on four axes: EPF — automatic, employer-matched, tax-free, retirement-locked (your salaried retirement base). PPF — safe, tax-free (EEE), 15-yr lock-in, open to all (the safe long-term tax-free sleeve). NPS* — low-cost, market-linked growth, extra ₹50k tax break, but partial forced annuityA product that pays a guaranteed regular income. (extra deductionAn amount subtracted from income before tax. + growth sleeve). SSY — highest guaranteed rate, tax-free, but only for a girl child under 10 (best safe girl-child goal vehicle). FDs — fully liquidHow easily an asset can be bought or sold without moving its price.-ish and flexible, but fully taxed and often the lowest after-tax return (short-term/emergency money). Read down the columns and the jobs emerge: need liquidity? FDA bank deposit locked for a fixed term at a fixed rate.. Safe long-term tax-free? PPF/SSY. Retirement with growth + extra tax break? EPF + NPS. A girl-child goal? SSY. The mistake is asking “which is best?”; the right question is “which fits this specific money’s horizon, liquidity need, tax situation and eligibility?” — and the answer is usually a combination across goals. Use the table as a decision map, not a ranking.
- EPF — auto + employer match + tax-free, retirement-locked → salaried retirement base.
- PPF — safe, tax-free (EEE), 15-yr lock, open to all → safe long-term tax-free sleeve.
- NPS — low-cost, market-linked, extra ₹50k deductionAn amount subtracted from income before tax., partial forced annuityA product that pays a guaranteed regular income. → extra tax break + growth.
- SSY — highest guaranteed rate, tax-free, girl child <10 → best safe girl-child goal vehicle. FDA bank deposit locked for a fixed term at a fixed rate. — liquidHow easily an asset can be bought or sold without moving its price./flexible but fully taxed → short-term/emergency money.
ExampleA salaried parent of a young daughter doesn’t pick one scheme — they use a combination: EPF (auto retirement base) + NPS (extra ₹50k deductionAn amount subtracted from income before tax. + growth) + PPF (safe tax-free long-term) + SSY (daughter’s goal) + an FDA bank deposit locked for a fixed term at a fixed rate./liquid fundA low-risk debt fund for parking cash short-term. (emergency money). Each scheme does the job it’s best at. Asking “which is best?” misses the point — the portfolio uses several, matched to different goals.
Key takeawayNo scheme is universally “best” — each wins on a different axis (return, safety, liquidityHow easily an asset can be bought or sold without moving its price., tax, eligibility), so match the scheme to the money’s job: EPF (retirement base), PPF (safe tax-free long-term), NPS (extra tax break + growth, annuityA product that pays a guaranteed regular income. catch), SSY (girl-child goal), FDA bank deposit locked for a fixed term at a fixed rate. (liquidHow easily an asset can be bought or sold without moving its price./short-term). Most people use a combination across goals.
FAQs
Which one scheme should I put all my savings in?
None — concentrating in one misses the point. Each scheme is optimised for a different job, so a sensible plan *combines* them by goal and horizon: EPF/NPS for retirement, PPF for safe long-term tax-free money, SSY for a girl child, FDs/liquid funds for emergencies and short-term needs, and equity/equity funds for long-term growth beyond these fixed-income options. Match each rupee to its job.