EPF vs PPF vs VPF: Accumulating money for retirement fund requires serious thought because after you retire, you will not have enough money to take care of all your needs, especially if emergencies strike. Also, after retirement, your earning potential plunges. So, it's always advisable to make a diversified investment and allocate some amount in the assured return tools like EPF (Employees' Provident Fund), Public Provident Fund (PPF) and Voluntary Provident Fund (VPF) while your career is taking off. Now, the question is, in EPF vs PPF vs VPS, which one is better money-making provident fund investment tool and how can you maximise return on your money?

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Speaking on EPF vs PPF vs VPF issue, Kartik Jhaveri, Director — Wealth Management at Transcend Consultants said, "Employees' Provident Fund or EPF option is available for the salaried persons working in a private company that has at lest 20 employees enrolled. EPF is a mandatory investment for a private company's employees while PPF is a voluntary provident fund tool that is open for all. It can be opened by those also who are not a salaried even. You can open a PPF account in a bank or in the post office and continue investing for at least 15 years, which is the lock-in period of a PPF account - it can be extended thereafter. VPF or Voluntary Provident Fund is also available for the salaried people who have EPF account and they want to invest more than the mandatory 12 per cent of their basic monthly salary." 

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Jhaveri said that in EPF you will have to invest till retirement, in PPF the lock-in period is 15 years and after 15 years you can either extend it for next five years or go for the PPF withdrawal. In VPF, it is like EPF where you get all terms and conditions like in EPF.

Speaking on EPF vs PPF vs VPF interest rate, Manikaran Singhal, a SEBI registered tax and investment expert said, "In PPF, EPF and VPF, the interest rate is announce in each quarter by the EPFO. Currently, EPF interest rate is 8.5 while PPF interest rate is 7.1 per cent. In VPF, one gets the same interest rate that one's EPF account is fetching. Means, one will get 8.5 per cent annual interest rate in VPF."

On which one is better, Singhal said, "If the investor is an EPF account holder, then there is no point in investing in PPF because they can ask their recruiter to deduct VPF from their monthly CTC and get 1.4 per cent more annual return (8.5 - 7.1 = 1.4). Most importantly, they will get the same Section 80C income tax exemption on both EPF, VPF and PPF for investment up to Rs 1.5 lakh. So, it's better to go with single tool i.e. EPF and VPF. In VPF, recruiters don't need to pay additional monthly contribution -they have to put in only 12 per cent of the monthly basic salary of the employee as monthly contribution. So, for a salaried person, VPF is better than PPF."