EPF vs PPF | Is EPF better than PPF

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The long-term investment schemes for retirement are the Employee Provident Provident Fund (EPF) and the Public Provident Fund (PPF). Owing to their calm, safe, and slow attitude, they’re considered safe. Here, you may continue to invest little sums that, by the time you retire, add up to a sizable capital. We will discuss the difference between EPF and PPF in this article.

What is EPF or Employees’ Provident Fund?


Employees’ Provident Fund (EPF) deductions are required from employees’ paychecks who work for organizations that qualify. This sum is placed into the employee’s EPF account, and the employer must also pay a set amount. The primary goal of the EPF is to assist employees in saving and amassing a sizeable quantity of money for their retirement years to maintain their financial independence. According to the Employees’ Provident Fund and Miscellaneous Act, 1952, EPF is maintained by the Employees’ Provident Fund Organization (EPFO). 

According to EPFO regulations, a combined 24 percent of your basic pay is contributed to the EPF account by both you and your employer. When retiring or moving to employment, you can withdraw the money you’ve saved in your EPF account. When a person moves jobs, the Employees’ Provident Fund account can be moved from one company to another.

What is PPF?

A well-known government savings program is the Public Provident Fund (PPF). One of the most well-liked tax-saving investment possibilities is provided by Section 80C. The basic goal of the PPF is to make it easier for people to save and invest little sums whenever they wish. This includes people who work in all areas. Compared to savings bank accounts, the PPF account gives a larger return. With this scheme, one may start investing with as little as Rs. 500 and Rs. 1,50,000 and receive all of the lucrative, tax-free rewards. The program is exclusively available to Indian citizens.

Difference between EPF and PPF

S.No. Employees’ Provident Fund (EPF) Public Provident Fund (PPF)
1. Investments in the EPF earn an interest rate of 8.1 percent. For a PPF account, it is 7.1 percent.
2. Enables salary workers of a business that is registered with the EPF Act to invest Except for NRIs, any Indian citizen may invest in PPF.
3. When you quit a job, you can take the funds from your EPF account. The sum put in a PPF cannot be withdrawn until it reaches maturity, which takes 15 years from the date of deposit.
4. Contribution is deductible from taxes. The maturity amount is tax-free once a minimum of 5 years have passed. Under Section 80C, the investment is tax deductible. Money at maturity is tax-free.
5. A person may withdraw money out of their EPF account to cover personal expenses. One may get a loan against PPF accounts.
6. 12 percent of income is required by law.  As agreed upon by the employee and the employer, the amount may be raised. A person can invest a minimum of Rs. 500 and a maximum of 1,50,000 rupees every fiscal year

Can a person have both EPF and PPF?

Yes, one can have both simultaneously. There are no limitations on an employee holding both an Employees’ Provident Fund and Public Provident Fund account.

EPF and PPF interest rate

Every year,  the EPFO announces the EPF rate. Current EPF rates are 8.50 percent and PPF rates are 7.1 percent. The EPF rate has historically been slightly higher (8.65 percent) than the current rates for FY 2021–22 and PPF.

Which is a better option, the Employees’ Provident Fund or the Public Provident Fund?

  • A PPF account is less advantageous than an EPF account since, in addition to you, your employer also pays for your EPF account. It is a collaborative investment in your future. But a PPF account does not allow for such a deposit. 
  • Additionally, you are permitted to withdraw funds from your Employees’ Provident Fund account as needed to fulfill personal needs. However, you are unable to do this with a PPF account. You cannot withdraw money from your PPF account until it has reached maturity.
  • Also, the interest rate on an EPF account is larger than the interest rate on a PPF account.



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