EPF (Employee Provident Fund) and PPF (Public Provident Fund) are both popular savings schemes in India that are designed to encourage long-term savings and provide financial security to individuals.
EPF is a retirement savings scheme that is provided by employers to their employees, while PPF is a savings scheme that can be opened by any individual.
Here are some key differences between the two:
- Eligibility: EPF is available only to salaried employees who are working for an employer who is registered under the EPF scheme. PPF, on the other hand, is available to all Indian citizens, including self-employed individuals.
- Contribution: In EPF, both the employer and employee contribute to the fund, with the employer contributing 12% of the employee’s basic salary and the employee contributing an equal amount. In PPF, only the individual can make contributions.
- Interest rate: The interest rate on EPF is determined by the government and is subject to change every year. In contrast, the interest rate on PPF is fixed by the government and is also subject to change every year.
- Investment limit: The maximum investment limit for EPF is determined by the employee’s salary, and the employer is obligated to contribute up to the maximum limit. In PPF, the maximum investment limit is currently set at Rs. 1.5 lakh per year.
- Withdrawal: Withdrawals from EPF are subject to various restrictions, including the requirement that the account holder must have completed a certain number of years of service. In PPF, withdrawals can be made after a certain number of years, but the amount that can be withdrawn is limited to a percentage of the balance
In summary, EPF is a retirement savings scheme for salaried employees, while PPF is a savings scheme that can be opened by any individual. The two schemes have different eligibility criteria, contribution rules, interest rates, investment limits, and withdrawal rules