Difference between EPF, PPF and VPF

Retirement scheme is the buzzword among the youths nowadays and due to the availability of so many options, it has become confusing for investors. Learn about the differences between EPF, PPF and VPF here.
Difference between EPF, PPF and VPF
Difference between EPF, PPF and VPF

Difference between EPF, PPF and VPF: There has been an increase in the awareness of young professionals with regard to retirement planning and due to various available options it becomes confusing.

Here we will be discussing the differences between the EPF, PPF and VPF which will help you get a better understanding of these financial products.

Keep reading.

Employee Provident Fund or EPF

EPF is a mandatory investment for an individual who is working in a company with more than 20 employees. As a rule, the employee needs to invest 12% of the basic pay towards the EPF contribution, apart from employee contribution, the employers also contribute 12% to the PF account of employees.

The highlight of EPF is that the amount earns interest at 8.5% and the investment is regarded as a risk-free investment that is used to create financial stability for the future.


Voluntary Provident Fund or VPF

VPF is another scheme in which there is no risk in investment. In VPF an individual can contribute any amount of money, but it should be more than the contribution made in EPF. 

Also, unlike EPF, there is no such criteria where employers need to contribute to the account.

It should also be noted that there will not be a separate account for VPF contributions, and it will be credited to the EPF account of the individual.

Public Provident Fund or PPF

The PPF is an investment scheme endorsed by the Government. The point to note about PPF is that it is valid for an investment period of 15 years.

This investment scheme guarantees fixed returns and provides tax benefits to the investor.

The interest that is earned on the PPF investment is compounded annually which helps in building up the wealth.

There is a restriction of investing only 1.5 lakh in a calendar year in PPF accounts.

Let’s look at the differences between EPF, VPF and PPF below:





Account Can be Opened By

Salaried Individuals

Salaried Individuals

Can be opened by anyone except NRI’s

Interest Rate(%)





Till Retirement or Leaving the Job

Till Retirement or Leaving the Job

15 years

Loan Availability

Partial Withdrawal Facility available

Partial Withdrawal Facility available

50% can be withdrawn after 6 years


12% of basic pay by individual

Up to 100% of basic pay by an individual

1.5 lakhs in a year

Contribution by Employer

12% by employer

Not applicable

Not applicable

Taxation on Maturity






EPF and VPF are applicable if you are employed while PPF can be opened by anyone ( salaried or self-employed). Also, if the motive is to earn tax-free income then you can invest in all three schemes.

Also, if you are investing with a specific purpose like child education or marriage then you can invest in PPF.

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