PPF vs EPF: Key Differences in Returns, Eligibility, and Tax Benefits

When it comes to long-term savings in India, PPF, a government-backed long-term savings scheme open to all Indian residents. Also known as Public Provident Fund, it's a favorite for parents saving for their child's education or retirees building a tax-free nest egg. Then there's EPF, a mandatory retirement savings plan for salaried employees, managed by the EPFO. Also known as Employee Provident Fund, it's automatically deducted from your salary every month, with your employer matching your contribution. Both are safe, government-guaranteed, and offer tax breaks—but they’re not the same. PPF is voluntary, flexible, and open to anyone—even self-employed people or homemakers. EPF is tied to employment; if you’re not on a payroll, you can’t join.

Here’s the real difference: PPF gives you a fixed interest rate set by the government each quarter—currently around 7.1%—and your money locks in for 15 years, with partial withdrawals allowed after 7 years. EPF earns a slightly lower rate, around 8.15% in 2024, but you can withdraw it when you leave a job or retire. PPF contributions are capped at ₹1.5 lakh per year. EPF has no cap—you and your employer contribute 12% of your basic salary, so if you earn ₹50,000, you’re saving ₹12,000 a month automatically. Both are tax-exempt under Section 80C, and the interest and maturity amount are completely tax-free. But PPF is better for disciplined, long-term savers who want to build wealth slowly. EPF is your forced savings plan that doubles as a retirement safety net.

Many people use both: EPF for the automatic, high-contribution pull from salary, and PPF for extra savings with more control. If you’re self-employed, PPF is your only option. If you’re salaried, EPF is non-negotiable—but you can still open a PPF account on the side. The biggest mistake? Treating them as interchangeable. PPF is a savings goal. EPF is a job benefit. One grows quietly over 15 years. The other kicks in when you change jobs or retire. You don’t pick one over the other—you use them for what they’re designed for.

Below, you’ll find real-world breakdowns of how these funds work in practice—from how much you actually take home after deductions, to when you can access your money, and why some people end up losing out by misunderstanding the rules. Whether you’re planning for your child’s future, your retirement, or just trying to make sense of your payslip, these guides will show you exactly how to use PPF and EPF without guessing.

PPF vs EPF for Retirement in India: Which Gives Better Returns, Safety, and Access?
PPF vs EPF for Retirement in India: Which Gives Better Returns, Safety, and Access?

Compare PPF and EPF for retirement in India-returns, risk, and access. Learn which one suits you better and how to use both for maximum tax-free growth.

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