EPF and PPF are India’s two pillars of government-backed retirement savings — both safe, both tax-free at maturity (EEE), but with very different mechanics. EPF is automatic for salaried employees with employer matching. PPF is voluntary and accessible to all. Most working Indians should use both — and this calculator shows why.
Calculator → Comparison
EPF (Salaried)vsPPF (Voluntary)
Two government-backed retirement vehicles for Indians — auto-deducted EPF vs voluntary PPF. Use both, but understand the differences.
EPF (Salaried) Option A
Employees’ Provident Fund. 12% of basic from employee + 12% from employer. Slightly higher rate than PPF.
EPF (Salaried)
PPF (Voluntary) Option B
Public Provident Fund. Anyone can open. ₹1.5 L/year max. 15-year lock-in. Fully tax-free maturity.
PPF (Self-Driven)
The Verdict
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Side-by-Side
| Feature | EPF | PPF |
|---|---|---|
| Eligibility | Salaried only (employer with 20+ staff) | Anyone (incl self-employed, kids) |
| Contribution | 12% of basic (auto-deducted) | Voluntary, ₹500 to ₹1.5L/year |
| Employer Match | 12% of basic (matches) | None |
| Interest Rate FY 2024-25 | 8.25% | 7.10% |
| Lock-In | Until retirement / job change (5 yrs to be EEE) | 15 years (extendable in 5-yr blocks) |
| Partial Withdrawal | For specific reasons after various tenures | From year 7 (limited amounts) |
| Tax Treatment | EEE if 5+ years; otherwise taxable | EEE always |
| Loan Against | Yes (for housing/marriage/medical) | From year 3 onwards |
Why EPF Wins for Salaried Indians
- Free money via employer match — your effective contribution rate is 24% of basic (12% you + 12% employer) on the same salary.
- Higher interest rate — EPF’s 8.25% beats PPF’s 7.10% by 1.15% annually, which compounds significantly.
- Automatic discipline — deducted from salary before you see it.
- Effective lock-in is shorter — you can withdraw fully at retirement or after 2+ months of unemployment.
If you’re salaried, EPF should be your first retirement savings vehicle. Then top up with PPF for additional 80C deduction and tax-free corpus.
Why You Still Need PPF (As a Top-up)
- Maxes 80C deduction — even if EPF already does, PPF doubles up the safety net.
- Tax-free withdrawal certainty — EPF taxability requires 5+ continuous years; PPF is always EEE.
- Self-driven amount control — PPF lets you contribute ₹0-150K/year; EPF is locked at 12% of basic.
- Open in spouse’s/child’s name — extra ₹1.5 L per family member of tax-free retirement money.
- Backup for job-loss period — if EPF takes a hit during unemployment, PPF stays growing.
Recommended Allocation
For most salaried Indians, the optimal mix is:
- EPF (mandatory) + Voluntary PF (VPF) — let it run, possibly increase via VPF to lock in 8.25% on more savings.
- PPF ₹1.5 L/year — separate retirement bucket; tax-free; self-driven; opens compounding for 15+ years.
- NPS ₹50K/year (80CCD-1B) — separate ₹50K tax deduction + equity exposure for higher long-term return.
- Equity SIP — for liquid wealth-building beyond retirement.
Worked Example
Frequently Asked Questions
Is EPF interest rate guaranteed?▾
Can I increase EPF contributions?▾
What happens to EPF if I change jobs?▾
Should I withdraw EPF when changing jobs?▾
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