PPF is better than EPF and NPS.
Why I won’t pick EPF, NPS? Check the above table first.
- Tax Status of EPF - You need to employed till the age of 60 to get EEE tax status. If you wish to start your business and leaving your job, then you fall into ETT tax status since your accumulation is taxable and withdrawal is taxable as per Income tax act.
- Tax Status of NPS - Your accumulated corpus of 40% is taxable and rest 60% is tax free. You need to take an annuity for 40% to avoid tax while withdrawing. But Annuity income is taxable as per Income tax act.
- Premature Withdrawal from EPF is not so easy whereas NPS it is not possible
- Liquidity of both EPF and NPS are poor when compared to PPF.
- Safety of EPF is slightly riskier than PPF. Because EPF is managed by EPFO (which is backed by govt) and private trusts. EPFO (part of money managed by SBI, HSBC, etc) and Private trusts can lend to other companies where default can happen like DHFL, IL& FS etc.
- Withdrawing EPF is troublesome, not so easy and patience tested process. There are several forms available, one need to aware which form to submit which might delay the whole process.
Why I choose PPF?
- Tax Status - EEE irrespective of Employed or Salaried.
- Safety - Sovereign guarantee backed by Government of India
- Liquidity is better, can be extendable in block of 5 years with or without contribution.
- PPF account can be opened easily by online unlike EPF, where employers only can able to open.
- Overdraft facility available over PPF account.
