PPF vs EPF vs VPF: Which should you choose? Here's a comparison of interest rates, tax benefits, tenure & more

A significant part of your financial planning is making arrangements for your retirement. For this, the public provident fund (PPF), employees provident fund (EPF), and voluntary provident fund (VPF) are reliable and safe tools at the disposal of a conservative investor looking for consistent long-term returns.

Launched by the Government of India, PPF, EPF and VPF are savings schemes with generally high rate of interest and tax-free payout, making these an effective instrument for retirement planning.

Public Provident Fund (PPF): Key highlights

PPF is a government backed savings scheme, with guaranteed tax-exemption on investment, maturity amount and interest earned (aka EEE benefit), at a fixed interest rate of 7.1% this quarter. It is among the safest investment options for retirement and tax planning in India.

A PPF account is offered by any post office or public bank and some private banks in India, for a minimum deposit of ₹100-500 each month. This has KYC requirement where you will need to submit the duly filled form with your Aadhaar Card copy, proof of residence, and a passport size photo.

You can also directly open a PPF account through your bank through online banking or mobile banking.

Employees Provident Fund (EPF): Key Highlights

EPF is administered by the Employees’ Provident Fund Organisation (EPFO) under the EPF Act of 1952. While PPF is available to all Indian citizens, EPF is a retirement savings scheme available to the salaried class.

It functions through joint contributions from both the employer and employee, wherein you receive the lumpsum corpus at retirement. The current EPF interest rate of 8.25% per annum — higher than PPF and same as VPF.

Notably, employee contributions up to ₹1.5 lakh annually are exempt under Section 80C of the old tax regime. While employers' up to 12% contribution (below ₹7.5 lakh) is exempt under the old and new tax regimes.

For employees, interest on accumulated contribution up to ₹2.5 lakh is tax-free, while interest on the employer's contribution is tax-free.

EPF Eligibility

• Mandatory enrolment of salaried individuals with basic pay and dearness allowance of up to ₹15,000.
• If basic pay and DA exceed Rs.15,000, you can still opt for voluntary contribution.

Voluntary Provident Fund (EPF): Key Highlights

VPF is a non-compulsory, government-backed investment scheme for salaried employees over and above the EPF with low risks and high returns. While EPF restricts employee contribution to 12%, VPD allows maximum contribution of up to 100% of basic pay and DA.

EPF and VPF have the same interest rate. For FY26 this is 8.25%. Further, like PPF, this is a EEE category option up to ₹2,50,000 contribution. Annually, contributions up to ₹1.5 lakh annually are exempt under Section 80C of the old tax regime.

Notably, while VPF is voluntary, once chosen, individuals cannot opt out for at least five years. If the withdrawal happens before the 5-year minimum tenure, then tax will be applicable.

Employers are not obligated to contribute to VPF.

(All rates are as mentioned on the respective bank's official website, at time of writing on 13 March 2026)

Disclaimer: This story is for educational purposes only. The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.