EPF, PPF and VPF are an important part of the retirement planning of all the three people. Image Credit source: File Photo: Getty
If you are saving to create a retirement fund, then you must have heard or read about EPF and PPF. But have you ever even heard of VPF? Do you know their difference? Let’s know about them…
EPF, PPF and VPF are an important part of the retirement planning of all the three people. These retirement plans have received support from the government.
What is EPF, PPF and VPF?
EPF is called ‘Employee Provident Fund’, VPF is called ‘Voluntary Provident Fund’ and PPF is called Public Provident Fund. This is the difference between these three.
- EPF It has been created to provide financial security to the employees of the organized sector at the time of retirement. In this, the employee of a company contributes 12 percent of the salary made by including his basic salary and dearness allowance. The company also has to contribute the same amount. EPFO determines the interest for this.
- vpfIn a way, it is an extension of EPF. In this, a person can contribute some part of his salary and maximum 100 percent of basic salary and dearness allowance in this fund. Interest on this is also calculated according to EPF. Contribution to VPF makes your retirement as secure as EPF.
- ppf It is a simple scheme providing government guarantee and security of income. Its interest is fixed by the government every quarter. It is similar to EPF, but anyone can invest in it.
Which scheme is suitable for whom?
Generally people who get salary means come in salaried class. EPF and VPF are a good investment option for them. Whereas for those who do their own work or any business, the PPF scheme is better for them. PPF is considered a safe and good return investment.
