PPF vs EPF
Two government-backed Indian retirement funds - which one builds more wealth?
TLDR
EPF is mandatory for salaried employees at firms with 20+ workers - the employer matches your 12% contribution and the current rate is 8.25%. PPF is open to anyone for Rs 500-1,50,000/year at 7.1% with a 15-year lock-in. If you're salaried, you already have EPF; PPF is extra. If you're self-employed, EPF isn't an option so PPF is your only EEE bet.
Side-by-side comparison
| Criterion | PPF | EPF | Winner |
|---|---|---|---|
| Eligibility | Anyone (incl. self-employed) | Salaried employee at 20+ employee firm | PPF |
| Current rate | 7.1% (Q1 FY26) | 8.25% (FY25) | EPF |
| Employer match | None | 12% of basic + DA matched by employer | EPF |
| Tax (contribution) | 80C up to Rs 1.5L | 80C up to Rs 1.5L (employee share) | Tie |
| Tax (growth) | Tax-free | Tax-free up to Rs 2.5L/yr contribution | PPF |
| Tax (maturity) | 100% tax-free | Tax-free after 5 years of continuous service | PPF |
| Lock-in | 15 years | Until retirement / 2 months after leaving job | Tie |
| Partial withdrawal | From year 7 | For specific reasons (marriage, medical, home) | EPF |
| Voluntary contribution | Rs 500-1.5L/yr | VPF (voluntary PF) up to 100% of basic | EPF |
| Account portability | Same account lifetime | UAN transfers when you change employer | EPF |
Run your own numbers
Plug in your numbers - the calculator updates instantly. Same math, your inputs.
Estimates only. Returns are not guaranteed. Tax rules and rates current as of 2026-05-16.
When each one wins
When PPF wins
- You're self-employed, a freelancer, or a business owner (EPF isn't open to you)
- You've already maxed EPF and want additional EEE savings
- You want a 15-year lock-in (forced discipline) vs employment-tied withdrawal rules
- Your spouse / kids should also have their own PF (PPF allows separate accounts per family member; EPF doesn't)
- You want guaranteed sovereign-backed returns without depending on employer compliance
When EPF wins
- You're a salaried employee at a firm with 20+ workers (EPF is mandatory anyway)
- Your employer reliably matches contributions (effective return doubles)
- You're aiming for lifetime pension via EPS (only available in EPF)
- You'd benefit from the higher 8.25% rate vs PPF's 7.1%
- You want extra contributions via VPF (voluntary PF, same 8.25% return as EPF)
The math (typical scenario)
Comparing PPF vs EPF for someone earning Rs 8L basic + Rs 50K HRA contributing both employee and employer share to EPF:
PPF (Rs 1.5L/yr at 7.1% for 30 years) Total contribution: Rs 45 lakh Maturity: Rs 1.55 crore (tax-free) EPF (12% employee + 12% employer of Rs 8L basic at 8.25% for 30 years) Annual employee contribution: Rs 96,000 Annual employer contribution: Rs 96,000 (8.33% goes to EPS, 3.67% to EPF) Effective annual contribution to EPF: Rs 96,000 + Rs 29,360 = Rs 1,25,360 Maturity at 8.25%: Rs 1,25,360 * [(1.0825^30 - 1) / 0.0825] = Rs 1.86 crore Plus EPS pension (~Rs 7,500/month) for life Net: EPF wins by Rs 30+ lakh PLUS lifetime pension - but only because of the employer match. Without it, PPF's 7.1% is competitive with EPF's 8.25%.
How EPF and PPF actually work
EPF (Employees' Provident Fund)
Statutory savings scheme under the EPF Act 1952. Mandatory for any organisation with 20+ employees and salary up to Rs 15,000/month (most firms apply it to all employees regardless). Employee contributes 12% of basic + DA; employer matches with 12% (split as 8.33% to EPS pension fund, 3.67% to EPF). Withdrawals before 5 years of continuous service are taxable; after 5 years tax-free under Section 10(12). VPF (Voluntary PF) lets you contribute up to 100% of your basic at the same rate.
PPF (Public Provident Fund)
Open to all Indians (residents). Minimum Rs 500 / maximum Rs 1,50,000 per year. Quarterly-declared interest rate (currently 7.1%). 15-year lock-in extendable in 5-year blocks. EEE tax treatment (Section 80C[3] on contribution, tax-free growth, tax-free maturity).
What to do
If you're salaried: max EPF (you can't opt out) + max PPF Rs 1.5L for additional EEE corpus. If self-employed: PPF is your primary EEE option + add NPS for additional Rs 50K under 80CCD(1B).
Frequently asked questions
Is EPF only for salaried employees?
Yes. EPF is mandatory for organisations with 20+ employees. If you're self-employed, a freelancer, or run a small firm without 20 employees, you can't open an EPF account.
Can I open both PPF and EPF at the same time?
Yes. EPF is automatic if you're salaried. PPF is an open account anyone can open at any major bank or post office. Running both is standard practice.
Why does EPF pay more than PPF?
EPF rate is set by EPFO based on its surplus; PPF rate is set by Finance Ministry quarterly. Historically EPF has stayed 50-100 bps above PPF since EPF has flexibility on equity investment (15% allocation) which PPF doesn't.
What happens to my EPF when I change jobs?
Your UAN (Universal Account Number) stays with you. New employer just adds contributions to the same EPF account. EPFO portal lets you initiate the transfer.
Is VPF (voluntary PF) worth doing over PPF?
VPF gives the same 8.25% as EPF and counts toward the Rs 2.5L tax-free limit (above Rs 2.5L, the interest is taxable). For taxable interest, PPF's lower rate but full tax-free status often wins.
Can I withdraw EPF for a house purchase?
Yes. After 5 years of service, you can withdraw up to 36 months of basic + DA for home purchase. The withdrawal is tax-free.
Is the EPS pension good?
EPS gives a small lifetime pension (currently ~Rs 7,500/month max). It's a nice add-on but never going to be your primary retirement income.
What's the maximum I can put into PPF?
Rs 1,50,000 per financial year. You can open accounts for spouse and minor children too, but the combined family contribution caps the 80C deduction at Rs 1.5L.
Are NRIs eligible for PPF or EPF?
Existing PPF accounts can be continued by NRIs but no new ones. EPF rules depend on the employer - if you're working abroad, you contribute via the employer if applicable.
What if my employer doesn't deposit my EPF?
EPFO has an online complaint mechanism. EPF fraud is treated as a criminal offense. Check your EPF passbook on the EPFO portal every quarter.