EPF vs PPF: Know what is the difference between EPF and PPF and which one gives better returns.

A non-constitutional organization called the Employees' Provident Fund Organization (EPFO) encourages employees to set aside money for their retirement. The programs of the organization cover both domestic and foreign employees (from countries with whom EPFO has signed bilateral agreements).

EPF is the main scheme under the Employees' Provident Fund and Miscellaneous Act, of 1952. Explain that the Employees Provident Fund Organization (EPFO) oversees the administration of the program. 12% of the employee's basic salary and dearness allowance is contributed to the EPF by both the employee and the employer. This fund is available when the employer retires. Interest is also included in this. The interest rate on EPF deposits is currently 8.15 percent per annum.

Public Provident Fund: PPF is one of the most preferred long-term savings and investment schemes, mainly because it offers a combination of safety, returns, and tax benefits.

What is the difference between EPF and PPF?

When you leave the job, you can withdraw money from your EPF account. However, PPF deposits cannot be withdrawn until the account matures. It takes 15 years to mature.

Benefits of Employees Provident Fund (EPF):

• Money-back guarantee
• Tax benefit
• Long-term savings scheme
• Interest earned on EPF corpus is compounded annually
• Provides financial security

Disadvantages of Employees Provident Fund (EPF):

Returns are limited

• Early exit penalty
• EPF contribution is difficult
• Interest in EPF stops after moving to the smallest company

Benefits of Public Provident Fund (PPF):

• Government-Backed Savings Scheme
• profit guarantees
• Flexible
• Tax is not payable on interest or maturity amount earned
• Partial withdrawal is allowed

Disadvantages of Public Provident Fund (PPF):

• Lower interest rate than EPF
• 15 years lock-in-period
• Maximum deposit limit fixed ie Rs 1.5 lakh
• Strict premature withdrawal rules
• The premature shutdown is not allowed
• No Liquidity Available