Provident Fund is another common investment option but used interchangeably for EPF and PPF. Both are similar in few aspects but not same.
- EPF stands for employee provident fund and is applicable for salaried individuals.
- PPF stand for Public Provident fund which anyone can put investment into.
Both are long term investment options and offer less liquidity.
- Returns on both of them are announced yearly/ quarterly by Government bodies.
- Return you will receive in investment is not known in advance as it keeps on changing Quarterly/ yearly and the maturity of this instrument extends for longer period. However in the past 5-6 years the returns have ranged around 8% plus/minus 1%.
- Both give you the benefit of Sec-80 C deduction on the amount invested and the return is also exempt provided you are holding it for min 5 years in case of EPF. PPF partial withdrawals are permitted post 7th year .
Snapshot of both these instruments is as below:
| EPF | PPF | |
| Who | Salaried | Anyone |
| Frequency | Monthly deduction from salary | Min once in a year. |
| Tenor | Retirement. It can be withdrawn in case of unemployed. | 15 years. |
| Withdrawal | Permitted for specified usage | Permitted from 7th financial year. |
| Max withdrawal | Upto 90% | Upto 50% |
| Taxation of returns | If withdrawn before 5 years taxable | If withdrawn before 15 years taxable. |
Government is considering increasing giving the option of increasing equity contribution for EPF on which more clarity should come post March-19.
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