EPF, PPF, and GPF may sound the same but are actually different in nature. While EPF stands for Employee Provident Fund, PPF is an abbreviation for Public Provident Fund and GPF stand for Government Provident Fund.
EPF is a tax saving instrument offered to only salaried individuals from their current company which is covered under the Employees’ Provident Fund & Miscellaneous Provisions Act. Under this, both employee and employer need to invest 12% of the basic salary of the subscriber and dearness allowance and the rate of interest is declared every year by the EPFO. It currently stands at 8.65%. the minimum lock-in period is 5 years, before which EPF becomes taxable
On the other hand, PPF is a government-generated scheme for all citizens of India whether salaried, unemployed or retired. Here, the minimum investment amount is Rs.500 while the maximum is 1.5 lakhs. It has a minimum maturity period of 15 years, and an additional 5 if the subscriber is willing to pay for it. It has a fixed interest that is set by the government every quarter. The current rate is 8%.
The PPF rate is almost always less than the EPF rate. However, EPF is considered riskier due to the factor of equity exposure present in it.
The GPF is also a government scheme, however, applied for only government employees. Here, the employee invests only a sum of their salary, and all contributions are henceforth made by the government only. For the quarter ending December, the interest is levied at 8%. The contributions are stopped 3 months before the maturity date and on the date, the final amount of the balance is given on an immediate basis.
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