ZEE Business
ZEE BUSINESS
हिंदी में पढ़ें  हिंदी में पढ़ें
Live TV
Live TV
  • India
    • Economy
    • Politics
    • Markets
  • World
    • Economy
    • Politics
    • Markets
  • Companies
    • Auto
    • Banking & Financial Services
    • Pharma
    • Energy
    • Infrastructure
    • Media
    • IT
    • Telecom
    • Consumer Products
    • Aviation
    • FMCG
  • Personal Finance
    • Income Tax Calculator
    • Personal Loan Calculator
    • Car Loan Calculator
    • Home Loan Calculator
  • Mutual Funds
  • Technology
  • Automobile
    • Cars
    • Bikes
  • Small Business
    • SME
    • Startups
  • videos
  • photos
  • Authors
  • More ...
    • VIDEOS
    • PHOTOS
    • AUTHORS
Home » Personal Finance News

National Pension System (NPS) vs Public Provident Fund (PPF) vs vs LIC Jeevan Shanti Plan: Retirement schemes compared

Retirement planning is important for everyone. And the earlier one starts, the better it becomes in terms of financial returns.

  • Twitter
  • Facebook
  • GPlus
National Pension System (NPS)  vs Public Provident Fund (PPF) vs vs  LIC Jeevan Shanti Plan: Retirement schemes compared
PPF account matures in 15 years. It can be extended after 15 years by a block of five years. Image: Pixabay
By Rajeev Kumar
Updated: Wed, Oct 10, 2018
05:25 pm
New Delhi, ZeeBiz WebDesk
RELATED NEWS
Make more from NPS: Transfer EPF into National Pension System - Here's the process Make more from NPS: Transfer EPF into National Pension System - Here's the process
National Pension Scheme subscriber? Know what will change after Budget 2019, how you will benefit National Pension Scheme subscriber? Know what will change after Budget 2019, how you will benefit
National Pension System: No restriction on premature withdrawals from these accounts - What NPS subscribers must know National Pension System: No restriction on premature withdrawals from these accounts - What NPS subscribers must know
7th Pay Commission pension calculator: How pension for retired central government employees is calculated 7th Pay Commission pension calculator: How pension for retired central government employees is calculated
Latest National Pension System withdrawal rules: Here's all you must know to partially withdraw from NPS Latest National Pension System withdrawal rules: Here's all you must know to partially withdraw from NPS

Retirement planning is important for everyone. And the earlier one starts, the better it becomes in terms of financial returns. Some of the prominent government-backed schemes that always come into calculation while making retirement planning include the Public Provident Fund (PPF) and the National Pension System (NPS). LIC Jeevan Shanti is the latest retirement plan offered by India's largest insurer Life Insurance Corporation (LIC). All the three schemes are different from each other and come with distinct monetary and tax benefits. 

Here is a comparison of the three schemes in terms of eligibility, tax relief, the rate of interest and expected returns: 

Eligibility: Any resident Indian can open a PPF account. This can also be opened in the name of minor children. NPS can be opened only by an Indian citizen aged 18-65 years. Any Indian Citizen, resident or non-resident, between the age of 60- 65 years, can also join NPS and continue to invest up to the age of 70 years in NPS.

Minimum entry age for LIC Jeevan Shanti scheme is 30 years (completed)

Maturity: PPF account matures in 15 years. It can be extended after 15 years by a block of five years. No maturity tenure is there for NPS. One can contribute till the age of 70 years. LIC Jeevan Shanti is a single premium plan wherein the Policyholder has an option to choose an Immediate or Deferred annuity. The annuity rates are guaranteed at the inception of the policy for both Immediate and Deferred Annuity and annuities are payable throughout the lifetime of Annuitant(s).

Investment limit: In PPF, minimum investment limit is Rs 500, while the maximum amount if Rs 1.5 lakh per annum. In NPS, the minimum amount is Rs 6000 per annum, and the maximum amount should not be more than 10 per cent of the person's salary or the gross income. There is no maximum limit on investment in LIC Jeevan Shanti scheme. 

Tax benefit: 

PPF - Investment, maturity amount and returns are not taxed. 

NPS: Contribution and growth in corpus not taxed, lumpsum withdrawn is partially taxed. Income Tax Return benefit can be claimed only on Rs 1.5 lakh/per annum under Section 80 CCD(1) and an aditional Rs 50,000 under Section 80CCD (2). 

For a person with taxable income, Jeevan Shanti allows one to defer additional tax liability through the deferred annuity option.

Returns/Interest rate

PPF is currently offering 8% interest rate. It is announced quarterly by the government. The returns on NPS investments are market-linked. Experts believe NPS has the potential to bring more returns to the subscriber because of it being market-linked. However, PPF comes with a guaranteed return promise. Hence, it remains one of the most popular investment instrument. 

Jeevan Shanti offers a minimum annuity of  Rs 1000/month.  A one-time investment of Rs 10 lakh at the age of 45 in this scheme, will result in an annuity of Rs 206,600 (over Rs 17,000 per month) after 20 years, according to LIC official plan document.

In the case of NPS, one has to purchase an annuity for at least 40 per cent of the accumulated wealth at maturity. When the maturity amount is less than Rs 2 lakh, one can make a complete withdrawal. In case of PPF, there is no need to buy an annuity. 

NPS is purely a retirement saving scheme and financial planners' favorite. Unlike PPF, NPS can't be used for other purposes like children's education, daughter's education etc. 

Jeevan Shanti is purely an annuity scheme. 

TAGS:
National Pension SystemPublic Provident FundLife Insurance Corporation
RELATED NEWS
Make more from NPS: Transfer EPF into National Pension System - Here's the process Make more from NPS: Transfer EPF into National Pension System - Here's the process
National Pension Scheme subscriber? Know what will change after Budget 2019, how you will benefit National Pension Scheme subscriber? Know what will change after Budget 2019, how you will benefit
National Pension System: No restriction on premature withdrawals from these accounts - What NPS subscribers must know National Pension System: No restriction on premature withdrawals from these accounts - What NPS subscribers must know
7th Pay Commission pension calculator: How pension for retired central government employees is calculated 7th Pay Commission pension calculator: How pension for retired central government employees is calculated
Latest National Pension System withdrawal rules: Here's all you must know to partially withdraw from NPS Latest National Pension System withdrawal rules: Here's all you must know to partially withdraw from NPS

LATEST NEWS

No job loss! Alibaba CEO rules out layoffs this year despite China`s economic slowdown

Samsung Galaxy M10,M20 one hour sale at Reliance Jio today; save Rs 3110, know price, features and specs

Salaried employee? Retire rich! EPFO hikes Employee Provident Fund (EPF) interest rate to 8.65% - Calculate your gains

Vistara, Japan Airlines ink code share agreement

Modi govt Mudra Scheme: Get Rs 4 lakh loan to start this business

Nellore railway station to get world-class makeover; Venkaiah Naidu dedicates various train services to Andhra Pradesh

Another RBI rate cut on cards? Why home, personal, auto loan takers should expect more cheers

Taxpayers Alert! Check out these 8 new features at GST Portal: Here's how easy GSTR filing gets for you

Mutual Funds Sahi Hai but don't invest in more than 3 funds - Here's why; check logic with examples

EPF Interest Rate 2019: Central Board of Trustees hikes rate for EPFO subscribers; Check FULL TEXT of decision

  • India News
  • World News
  • Companies News
  • Market News
  • Personal Finance News
  • Technology News
  • Automobile News
  • Small Business News
  • Income Tax Calculator
  • Live TV
  • Videos
  • Photos
  • Author
  • Rss Feed
  • Advertise with us
  • Privacy Policy
  • Legal Disclaimer

Latest Trending Updates

  • Amazon Prime Day
  • Income Tax
  • Bharti Airtel
  • NPA
  • Home Loan

Trending Topics

  • Farm Loans
  • 7th Pay Commission
  • Sanitary Pads
  • National Stock Exchange
  • GST

Follow us on

zeebiz
zeebiz

Partner Sites

  • Zee News
  • Hindi News
  • Marathi News
  • Bengali News
  • Tamil News
  • Malayalam News
  • Gujarati News
  • Telugu News
  • Kannada News
  • DNA
  • WION
Copyright © Zee Media Corporation Ltd. All rights reserved