Difference Between EPF (Employee Provident Fund) Vs PPF (Public Provident Fund)?
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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