EPF vs PPF vs VPF vs GPF
PPF | GPF | VPF

EPF vs PPF vs VPF vs GPF – what are the differences in 2020?

Last Updated on 4 weeks ago by Raj

EPF vs PPF vs VPF vs GPF

PF is a safe and secure investment option that most Indians trust on, Specially the middle class employees. It provides excellent interest rates at the same time it is very easy and convenient most of the times as the employees prefer to contribute some part of their income to Provident fund via EPF.

Since there is much more to provident fund in terms of EPF ,

href="https://weinvestsmart.com/public-provident-fund-what-is-ppf/" target="_blank">PPF , VPF and GPF – Let’s have a look at what are key the differences between these investment options and which one is best for you to invest in.

EPF vs PPF vs VPF vs GPF
EPF vs PPF vs VPF vs GPF

EPF vs PPF vs VPF vs GPF – Key differences

FactorsEPFVPFGPFPPF
Kind of PFEmployee provident fundVoluntary provident fund   An extension of  EPF.General provident fundPublic provident fund
Account managed byEPFO(Employees’ provident fund organization )EPFO(Employees’ provident fund organization )Department of Pension and Pensioner’s Welfare      Banks/Post office on behalf of Central Government
EligibilityAny organization employing a minimum of 20 workers is liable to give EPF benefits to the workers.      salaried individuals who receive their monthly payments through a specific salary account and contribute to EPF.    Only Govt employees who are resident of India  and only if they have joined before 1st Jan 1004 can  invest in GPFAny Indian having age 18 or more can invest in  in PPF
Contribution  LimitsRestricts  to 12 % of basic salaryAllows more than 12 %   maximum contribution is up to 100% of his Basic Salary       Employee  contributes 6 % of the salary Government contributes 6% of the salaryMin of 500 and upto 1.5 lakh can be deposited in a financial year
Tax BenefitFalls under EEE category (( EEE – exempt on contribution; exempt from the principal; exempt on interest) )   Exempted from tax calculation under Section 80C  The VPF falls under the EEE category  GPF is a EEE tax-free retirement-cum savings scheme.    The VPF falls under the EEE category
Loan facilityThe employee should be in service for 5 years to be eligible to get loan against PF      The employee should be in service for 5 years to be eligible to get loan against PF  It can be availed at any time during the employmentBetween the third and fifth financial year from the date of opening the PPF account, PPF loans can be availed against the account.  
Lock in periodCan be closed while quitting job permanently. Can be transferred while changing companies till retirement.   Maturity amount is tax-free only on completion of 5 years.    same lock-in period as the EPF  on resignation or within 2 months of unemployment. Partial withdrawal is allowed, but the withdrawal amount is tax-free only if the account is at least 5 years old     Can be closed while quitting job permanently. Can be transferred while changing companies till retirement. -15 years of lock-in period . -duration can be extended by a block of 5 year  -premature withdrawal allowed with certain conditions.        
Interest rate in 20208.58.5 7.1 7.1
Reliability EPF account offers risk-free, guaranteed returns, and capital protection as it is backed by the Government of India. Therefore, opening a PPF account comes with minimal risks. VPF  account offers risk-free, guaranteed returns, and capital protection as it is backed by the Government of India. Therefore, opening a PPF account comes with minimal risks. GPF account offers risk-free, guaranteed returns, and capital protection as it is backed by the Government of India. Therefore, opening a PPF account comes with minimal risks.Public provident fund / PPF account offers risk-free, guaranteed returns, and capital protection as it is backed by the Government of India. Therefore, opening a PPF account comes with minimal risks.
EPF vs PPF vs VPF vs GPF – Key differences

From the above table it is clear that if you are a working individual then EPF/VPF is the best option for you considering the higher interest rate that you will receive in comparison to PPF. Also EPF/VPF has easier withdrawal option and transfer mechanism.

If you are not a working individual then PPF is a great choice for you to secure good interest rate with peace of mind of having Govt security over your investments.

If you are a Govt employee then you have a choice to invest in GPF which is more of less similar to PPF.

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