When it comes to long-term savings, both the Employees’ Provident Fund (EPF) and the Public Provident Fund (PPF) are excellent investment options. While both are backed by the government and offer secure returns, they cater to different types of investors. In this article, we compare EPF and PPF to help you decide which one suits your financial goals better.
EPF vs PPF Comparison Table
| Feature | EPF (Employees’ Provident Fund) | PPF (Public Provident Fund) |
| Eligibility | For Salaried employees in organizations | Open to all Indian residents |
| Contribution | 12% of basic salary (employee & employer (1%extra)) | Voluntary, â‚ą500 to â‚ą1.5 lakh per year |
| Interest Rate | Revised annually by EPFO (8.25% for FY 2024-25) | Revised quarterly by government (7.1% per annum for FY 2024-25) |
| Tax Benefits | Section 80C deduction; tax-free withdrawals after 5 years | Section 80C deduction; completely tax-free on maturity |
| Lock-in Period | Until retirement (partial withdrawals allowed (Advance Claims)) | 15 years (partial withdrawals from 7th year) |
| Employer Contribution | Yes, employer contributes | Not Applicable |
| Liquidity | Partial withdrawals allowed for specific reasons | Partial withdrawals allowed from the 7th year |
| Suitability | Ideal for salaried employees | Best for self-employed & individuals seeking tax-free growth |
Suitability for Long-Term Savings
- Choose EPF if you are a salaried employee looking for employer contributions and retirement benefits.
- Choose PPF if you want a flexible investment option with government-guaranteed returns, irrespective of your employment type.
Conclusion
Both EPF and PPF offer great benefits for long-term savings. EPF is ideal for salaried employees seeking higher contributions and employer support, while PPF is suitable for those looking for flexible, tax-free, and secure investment options. The best approach could be to invest in both schemes to maximize retirement savings and financial security.
For further updates on EPF and PPF, stay tuned to government notifications or consult your financial advisor.
