PPF vs NSC: What's the difference?

PPF is for 15 years, but you can extend it for a block of five years. Let's say you open a PPF account when you are 21 years old. It matures when you are in your late 30s, when you may be earning well and may not need the money. In that case, you can continue with the account.
Of course, you do have the option of withdrawing the entire balance on maturity, that is, after 15 years of the close of the financial year in which you opened the account.
So, if you opened it in FY 2006-07 (this financial year), you will be able to withdraw it 15 years later, starting March 31, 2007 (end of this financial year). That is April 1, 2022.
If you extend it for five years after that, you continue to earn the rate of interest and can also make fresh deposits and get the tax benefit.
NSC is for a much shorter duration -- just six years from the date of investment.
How many can I have?
Once you open an NSC, you can't keep adding to it. You will have to buy another. Let's say you buy a NSC of Rs 30,000. In a year's time, you want to add another Rs 30,000. You cannot add it to this amount. You will have to buy another NSC.
With PPF, you can have just one account. But this does not matter because you have to make annual additions. Every year, you keep adding to it.
However, if you like the safety of the investment and a guaranteed return of 8% per annum, you can open one in your child's name.
So you can have one account for yourself and one for your child. But this does not mean the tax benefit is doubled. The limit is the same -- Rs 70,000, irrespective if it all goes in your account or in your account and your child's.
Let's say you open an account for your minor child. You can deposit Rs 70,000 in your account and Rs 70,000 in your child's account. But you will only get the tax benefit on Rs 70,000.
How is it held?
The PPF account cannot be held jointly. You can nominate someone but it cannot be jointly held with someone else.
With NSC, you can hold it jointly or you can hold it singly and nominate someone.
Where can I open it?
To open a PPF account, you can drop by a State Bank of India [ Get Quote ] branch. No, you do not have to have an account with them.
You can also ask your nationalised bank where you have an account if they are authorised to open PPF accounts. You can also approach the head post office in your area. If that is inconvenient, ask your local post office (selection grade sub post offices are allowed to do so).
To buy an NSC, just approach any post office.