EPF vs PPF: Difference, Comparison, Returns & Which is Better

Exploring in detail the nuances of EPF and PPF.
4 mins
12 December 2023

Employee Provident Fund (EPF) and Public Provident Fund (PPF) are two popular options for efficient money investment, each with its own set of features and benefits. In this article, we will get into the nuances of EPF and PPF. We will compare key aspects to empower you with the necessary information. This can help you make better financial decisions.

What is an EPF account?

The Employee Provident Fund (EPF) is a mandatory savings scheme for salaried employees earning Rs. 15,000 or above in India. It is managed by the Employees' Provident Fund Organisation (EPFO), a statutory body under the Ministry of Labour and Employment. The primary objective of EPF is to provide financial security and stability during retirement by building a substantial corpus over the course of the employee’s working years.

What is a PPF account?

Public Provident Fund (PPF) is a voluntary long-term savings scheme backed by the Government of India. Open to both salaried individuals and self-employed individuals, PPF is designed to encourage small savings. A PPF account can be opened with any designated banks and post offices across the country.

EPF vs PPF comparison

Here is a comparison between EPF and PPF across various parameters:





Salaried employees

All individuals, including self-employed

Contribution limits

12% of basic salary from both employee and employer

Minimum Rs. 500 and maximum Rs. 1.5 lakh annually


Until retirement or job change

15 years (can be extended in blocks of 5 years)

Interest rate



Tax benefits

EEE (Exempt-Exempt-Exempt) - contributions, interest, and withdrawals are tax-free

EEE (Exempt-Exempt-Exempt) - contributions, interest, and withdrawals are tax-free. However, there are certain conditions when there is a partial withdraw


Can be closed while quitting job permanently

Lock in period of 15 years, which can be extended for 5 more years

Which is safer: EPF or PPF?

Both EPF (Employees' Provident Fund) and PPF (Public Provident Fund) are considered safe investment options in India. Both EPF & PPF are backed by the government. EPF offers stability through mandatory contributions from both employees and employers. PPF, on the other hand provides fixed interest rate, providing safety and steady returns. EPF tends to be more stable due to its mandatory nature and contributions from employers. Ultimately, the safety of either option depends on individual preferences, financial goals.

Limitation on withdrawal

1. EPF withdrawal:

  • You can withdraw entire EPF amount at the time of your retirement. The retirement age is 55 years set by EPFO.
  • Employee can withdraw 90% of their EPF fund, one year before their retirement age.
  • If a person is unemployed for a month, he/she can withdraw 75% of the EPF amount.
  • If a person is unemployed for more than 2 months, he/she can withdraw the entire EPF amount.
  • EPF allows partial/full withdrawals under certain conditions, such as medical emergencies, home loan repayment, or unemployment for a continuous period of 2 months.

2. PPF withdrawal:

  • You can withdraw the entire PPF amount, after its maturity i.e., 15 years.
  • You can withdraw 50% of the amount after end 6th year.

Taxation EPF vs PPF

1. EPF tax:

  • Employee's EPF contribution qualifies for a deduction up-to Rs. 1.5 lakh under Section 80C.
  • From the financial year 2020-21, any employer's contribution to the EPF account will be taxable. If the total contribution towards EPF, NPS, and/or superannuation fund exceeds Rs 7.5 lakh in a financial year.
  • Interest on an employee's EPF contribution up to Rs. 2.5 lakhs p.a. is tax-free. Beyond this Rs. 2.5 lakh it becomes taxable for employees.

2. PPF tax:

  • Investments made in PPF qualify for tax deductions under Section 80C of the Income Tax Act, up to a maximum limit of Rs.1.5 lakh per financial year.
  • The interest earned on PPF investments is tax-free, making it an excellent choice for individuals seeking tax-efficient, long-term savings.


EPF and PPF are crucial pillars of India's savings and retirement landscape. Where EPF is a mandate contribution and PPF is a voluntary one; both ultimately contribute to provide financial stability in times of need. By understanding the differences outlined in this article, you can make an informed decision that aligns with your long-term financial objectives.


As regards deposit taking activity of Bajaj Finance Ltd (BFL), the viewers may refer to the advertisement in the Indian Express (Mumbai Edition) and Loksatta (Pune Edition) furnished in the application form for soliciting public deposits or refer https://www.bajajfinserv.in/fixed-deposit-archives
The company is having a valid Certificate of Registration dated March 5, 1998 issued by the Reserve Bank of India under section 45 IA of the Reserve Bank of India Act, 1934. However, the RBI does not accept any responsibility or guarantee about the present position as to the financial soundness of the company or for the correctness of any of the statements or representations made or opinions expressed by the company and for repayment of deposits/discharge of the liabilities by the company.

For the FD calculator the actual returns may vary slightly if the Fixed Deposit tenure includes a leap year.