What is PPF?
The Public Provident Fund is a government-backed savings scheme with a 15-year tenure (extendable in blocks of 5 years). You can invest between ₹500 and ₹1.5 lakh per year, and the interest rate is revised quarterly by the government.
PPF offers EEE status — contributions, interest, and maturity proceeds are all tax-free. It is available to any Indian citizen through post offices and most banks.
What is EPF?
The Employees' Provident Fund is a mandatory retirement scheme for salaried employees. Both you and your employer contribute 12% of your basic salary, and the accumulated corpus earns interest at a rate announced annually.
EPF also enjoys EEE tax status. The employee contribution qualifies for 80C deduction, and the employer's contribution is tax-free up to 12% of basic salary.
Key Differences
PPF is voluntary and open to everyone, with a fixed ₹1.5 lakh annual cap. EPF is mandatory for salaried employees and has no upper cap on contributions, though employer contributions above 12% are taxed.
PPF allows partial withdrawals from year 7, while EPF allows withdrawals for specific purposes like home purchase, marriage, or medical emergencies. EPF also offers a pension component (EPS) that PPF does not.
Which One is Better?
If you are salaried, EPF is automatic and forms the backbone of your retirement corpus — you cannot opt out. PPF is an excellent addition for the extra ₹1.5 lakh 80C space and for self-employed individuals.
Both are among the safest investments in India with tax-free returns. Use our PPF calculator and EPF calculator to project your corpus at retirement.