NSC at 7.7% beats PPF at 7.1% by about ₹20,000 over five years pre-tax. PPF interest stays tax-free; the next quarterly rate review resets the comparison.
Alpha Score of 54 reflects moderate overall profile with strong momentum, poor value, moderate quality, moderate sentiment.
India's small-savings rates stayed unchanged for the July-September 2026 quarter, keeping the National Savings Certificate ahead of the Public Provident Fund on pre-tax returns. NSC pays 7.7%, PPF pays 7.1%.
On a ₹5 lakh corpus held for five years, NSC earns about ₹20,000 more than PPF before tax. The gap narrows after tax. NSC interest is added to the investor's income and taxed at the applicable slab rate. PPF interest is exempt from income tax.
The ₹5 lakh comparison is an illustration, not a deposit plan. PPF caps annual contributions at ₹1.5 lakh, so a single-year ₹5 lakh deposit is not permitted. The PPF figure assumes an existing corpus earning 7.1% for five years.
NSC runs a fixed five-year term with annual compounding and no upper investment limit. The 7.7% rate is locked for the certificate's tenure. PPF runs 15 years, extendable in five-year blocks, allows loans from the third financial year and partial withdrawals from the seventh. Its rate is reviewed every quarter.
Both schemes qualify for a deduction under Section 80C, subject to the overall ₹1.5 lakh limit. The tax treatment of the interest is where they diverge. NSC interest is taxable; PPF interest is not.
For a five-year horizon, the choice turns on the investor's tax slab and cash-flow needs. A taxpayer in the highest slab gets more from PPF's tax-free interest despite the lower rate. An investor in a lower slab, or one who needs the money at year five, may prefer NSC's locked rate and shorter term.
The government's quarterly review is the next event that could shift the comparison. A PPF rate cut widens NSC's pre-tax edge; a hike narrows it. NSC's rate will not move until the certificate matures.
Investors can split the allocation across both schemes. NSC delivers the five-year return, PPF delivers tax-free compounding for those who can leave the money for 15 years. The Mint article also advises spreading money across fixed income, small-savings schemes, gold, equities and bonds, and reviewing the mix when rates move. The returns shown are illustrative and based on rates in force for the July-September 2026 quarter. NSC's 7.7% rate stays locked for the full five-year term.
Prepared with AlphaScala editorial tooling from the source reporting linked above. Indexable analysis may include a cited Alpha Score value. Publishing checks screen each story before release. Educational coverage, not personalized advice.