EPF vs PPF
Both are government-backed, tax-free retirement savings options — but they work very differently in who can use them, how much you can contribute, and how locked-in your money is.
Side-by-Side Comparison
| Feature | EPF | PPF |
|---|---|---|
| Who can open one | Salaried employees, via employer | Any resident Indian (and minors, via guardian) |
| Current interest rate | 8.25% p.a. | 7.1% p.a. |
| Contribution | 12% of Basic+DA (mandatory, employer-matched) | Voluntary, up to ₹1,50,000/year |
| Employer matching | Yes — employer contributes an equal share | No employer involvement at all |
| Lock-in period | Until retirement/resignation (partial withdrawal rules apply) | 15 years, extendable in 5-year blocks |
| Tax treatment | EEE, with a taxable-interest threshold on large contributions | Fully EEE (Exempt-Exempt-Exempt), no threshold |
| Partial withdrawal | Allowed for specific reasons (medical, home, education, etc.) | Allowed from the 7th financial year onward |
| Loan against balance | Not directly available | Available from 3rd to 6th year |
Which Should You Prioritize?
If you're salaried, EPF isn't really optional — your 12% contribution and your employer's matching share happen automatically every month, and the current 8.25% rate is higher than PPF's. The decision point is really whether to add PPF on top, or whether to use VPF (Voluntary PF) instead, since VPF rides on your existing EPF account and currently earns a higher rate than PPF, while PPF offers something EPF doesn't: it's open to anyone, including self-employed people and even as a savings vehicle for your children, with no dependency on formal employment.