EPF vs PPF – Which is the Best Savings Option?

byPriyanka JuyalLast Updated: August 14, 2023

Are you a salaried professional planning to secure your future or enjoy a comfortable post-retirement life? Look no further! The world of financial planning offers two remarkable options: the Public Provident Fund (PPF) and the Employees’ Provident Fund (EPF). These investment options not only provide tax benefits but also attractive interest rates, flexible deposit amounts, and numerous other advantages.

In this blog, we will look into the differences between PPF and EPF and determine where to invest first.

Difference Between PPF and EPF

PPF and EPF both offer tax saving benefits, help in building retirement corpus and encourage savings habits; however, here are some differences between the two.

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Online EPF Calculator

EPF vs PPF- Which One to Choose?

EPF and PPF are two popular investment options that cater to individuals seeking to secure their financial future. Understanding the key features of each scheme can help you make an informed decision.

Employee Provident Fund (EPF) is specifically designed for salaried professionals. It operates as a mandatory savings scheme where a portion of your salary, is deducted and contributed towards building a retirement corpus. The advantage of EPF is that the deduction is automatic, relieving you of the need to manually save from your income. In case of unforeseen circumstances such as unemployment, you can withdraw funds from your EPF account.

On the other hand, the Public Provident Fund (PPF) is a voluntary investment option with a longer tenure of 15 years. It allows individuals to contribute a flexible amount towards building a retirement corpus. PPF also offers the benefit of obtaining a loan against the deposited amount, if needed. Furthermore, the tenure of the PPF account can be extended in blocks of 5 years beyond the initial 15-year period.

It’s important to carefully evaluate your financial goals, risk appetite, and preferences before choosing between EPF and PPF. Consider factors such as the ease of contribution, withdrawal flexibility, interest rates, and the specific benefits that align with your needs.

Online PPF Calculator


What are the eligibility criteria for investing in PPF and EPF?

PPF is available to Indian residents, while EPF is exclusive to salaried professionals employed by a company registered under the EPF Act.

What is the minimum and maximum investment amount for PPF and EPF?

The minimum amount to invest in PPF is Rs. 500, while the maximum limit is Rs. 1.5 lakh. In the case of EPF, it is mandatory to contribute 12% of the salary, which can be increased voluntarily.

What is the tenure for PPF and can it be extended?

PPF has a tenure of 15 years. It can be extended in blocks of 5 years beyond the initial 15-year period.

How are the interest rates different for PPF and EPF?

PPF offers an interest rate of 7.1%, while EPF provides a higher interest rate of 8.5%.

What are the tax benefits associated with PPF and EPF?

Contributions made to both PPF and EPF are tax-deductible under Section 80C of the Income Tax Act. The amount after maturity is tax-free for both options. However, for EPF, tax-free status is applicable only after the completion of 5 years.

What are the circumstances under which one can withdraw funds from PPF and EPF?

PPF allows partial withdrawals after the completion of 6 financial years, while EPF permits complete withdrawals on retirement or in case of unemployment. EPF also allows partial withdrawals for higher education, weddings, home purchase, loan repayment, and house renovation.

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