Difference Between EPF (Employee Provident Fund) Vs PPF (Public Provident Fund)?
Do not get confused between EPF(Employee Provident Fund)and PPF(Public provident Fund) as both are two different funds in terms of participation though both are long term saving investment funds having almost similar returns and benefits.Employee Provident Fund (EPF) is meant for salaried employees whereas PPF is available to any citizen of India, basically it has started to provide the retirement or long term savings benefits to self-employed persons and workers of unorganized sectors.
Factors
|
Employee Provident Fund
|
Public Provident Fund
|
1.
Participation
|
Only salaried
employees can participate.
|
Anybody
can participate according to its rules.
|
2.
Applicability
|
Employee
cannot opt out to participate in EPF as it is mandatory.
|
It
is totally voluntarily.
|
3.
Scope
|
EPF’s
scope is limited i.e. only limited to salaried employees.
|
Its
scope is much larger.
Self-employed,
workers of unorganized sectors as well as salaried employees can invest.
|
4.
Tenure
|
EPF’s
tenure depends upon the length of an employee’s service.
|
PPF‘s
tenure is fixed for fifteen years and can be extended in blocks f 5 years.
|
5.
Contribution
|
Every
month a contribution of 12% of an employee’s basic salary plus an equal
contribution makes by employer thus making total contribution to 24%.
|
Here
one can deposit minimum Rs.500 and maximum of Rs.150000 in a year.
|
6.
Deposit
Frequency
|
EPF
contributions of employee and employer are being deposited mandatorily on
monthly basis.
|
Here
one can deposit in lump-sum or 12 equal installments or in any other
frequency subject to amount cannot exceed 1.5 lakhs in total for a year.
|
7.
Rate of
interest
|
At
present, EPF contributions get 8.65%p.a. interest. (subject to change)
|
PPF,
at present gets 7.8% rate of interest.(subject to change)
|
8.
Having EPF
& PPF, Both accounts
|
A salaried
employee apart from having EPF account can also have PPF account in his name.
|
A self-employed
person does not have any employer, thus by virtue of this he cannot have an
EPF account.
|
9.
Authority
|
EPF
is managed and controlled by EPFO, under Ministry of Labour & Employment-
Government of India.
|
PPF
is a statutory scheme by Central Government.
|
10.
Withdrawal
before maturity
|
An
EPF holder can withdraw amount as per his/her needs any time after providing
necessary documents as per the rules of EPF.
|
A PPF
holder can withdraw once per year amount from 7th year
onwards.
|
11.
Lock in Period
|
The
amount invested in EPF, remains blocked as long the tenure of an employee’s
service. (subject to permission of partial withdrawal as discussed in
point-10 above)
|
In
PPF, the amount invested remains blocked for 15 years. However a PPF holder
can extend the period of investment for another 5 years as per rules of PPF.
(subject to permission of partial withdrawal as discussed in point-10 above)
|
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