What Is The Difference Between PPF and VPF?

In my salary slip I have always noticed how the PPF amounts gets deducted but never thought of having VPF account as well. I believed that one can only opt for one such retirement scheme but later got to know that if I wish, I can opt for both. For me both were just retirement schemes only having the same features but upon discussion with several people I got to know about the VPF vs PPF differences. If you too want to know the differences between the two in brief, let me tell you what they are.

What is the difference between EPF PPF and VPF?

Companies that have more than 20 employees are bound to comply with EMP or Employee Provident Fund schemes of the government. Under this scheme, an employee is required to give a part of their monthly salary into the EPF account. It is generally 12% of the basic income and this same amount gets contributed by the employer as well.

PPF or Public Provident Fund is a government scheme that provides fixed return and tax benefits. Both salaried and non-salaried people can opt for this scheme and in this case, no contribution is made by the employer. The scheme extends for 15 years only. The interest earned on this scheme is compounded.

VPF or Voluntary Provident Fund is a voluntary scheme where people can contribute to their PF account over 12% of their salary as per EPF rules. There is no such separate account for VPF. The money gets deposited in the EPF account and contributors earn interest similar to EPF only.

The

VPF and PPF

difference is thus not very great.

The interest rates of both the schemes are different. If you want to know the VPF vs PPF interest rate, it is 8.5% and 7.1% respectively.

It is totally upon the person to decide where he wants to invest. VPF has a higher interest rate so definitely it will be better to invest in VPF.

This is all I can say about the

VPF vs PPF.