EPF vs PPF - Which One is Better to Invest?
EPF vs PPF - Which One is Better to Invest?
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When it comes to investing, many of us are confused about which investment route to take. Two of the most popular investment options are Employee Provident Fund (EPF) and Public Provident Fund (PPF). Both of these have their own advantages and disadvantages and an individual should take into account all the factors before making a decision. This article will help you understand the differences between EPF and PPF, so that you can choose the right one for your investment needs.

 

EPF:

Employee Provident Fund is a retirement savings plan that is linked to your salary. It is a mandatory contribution by the employer and employee and is invested in government-approved funds. The EPF contribution is tax-free and the interest earned on the amount is tax-free. EPF is one of the safest investment options as it is backed by the government and is risk-free.

 

PPF:

Public Provident Fund is a long-term savings option that is offered by the Government of India. It offers a tax-free interest rate of 8% per annum and provides the benefit of capital appreciation over the long-term. The amount invested in PPF is also tax-free. The PPF has a lock-in period of 15 years, which means that the funds cannot be withdrawn before the completion of this period.

 

Which is Better to Invest?

Both EPF and PPF have their own advantages and disadvantages. However, it is important to assess your individual needs and goals before making a decision. EPF is a safer option as it is backed by the government and offers a tax-free interest rate. The funds can also be withdrawn if required. On the other hand, PPF offers higher returns, but has a lock-in period of 15 years.

If you are looking for a short-term investment option, then EPF is a better option. However, if you are looking for a long-term investment that offers capital appreciation and higher returns, then PPF is the right choice. You can also use a PPF Calculator Online to Calculate PPF returns accurately.

Overall, both EPF and PPF offer attractive investment options and thus, it is important to assess your individual needs and goals before making a decision. Both options are safe and secure and it is up to the individual to make the right decision for their financial needs.

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