EPF vs PPF: Which can give higher copus on Rs 1.50 lakh/year investment for 20 years?
Compare PPF and EPF to determine which investment option creates a higher corpus in 20 years. Understand tax benefits, maturity rules, returns and choose the best savings plan for your future.
Choosing between Public Provident Fund (PPF) and Employees' Provident Fund (EPF) can significantly impact your long-term savings. Both schemes offer tax benefits and attractive interest rates, but which one yields a higher corpus over 20 years? This article breaks down key features like contribution limits, tax exemptions, withdrawal rules, and maturity benefits of both PPF and EPF. With detailed calculations and comparisons, you’ll gain insights to make an informed decision for securing a financially stable future.
(Disclaimer: This is not investment advice. Do your own due diligence or consult an expert for financial planning)
Public Provident Fund (PPF)
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Minimum deposit: Rs 500 per year.
Maximum deposit: Rs 1.5 lakh per year.
Minimum deposit: Rs 500 per year.
Maximum deposit: Rs 1.5 lakh per year.
Loan Facility
Loan available from the 3rd financial year to the 6th financial year.
Partial Withdrawals
Allowed every year from the 7th financial year.
Account Maturity
Matures after 15 full financial years.
Extension Options
- Extend the account in 5-year blocks with further deposits.
- Alternatively, retain the account indefinitely without further deposits.
Tax Benefits
- Deposits qualify for deductions under Section 80C of the Income Tax Act.
- Interest earned is exempt under Section 10 of the IT Act.
Legal Protection
Funds are protected from court attachments under any order or decree.
Investment and Returns
- Total investment: Rs 30 lakh over 20 years.
- Total interest earned: Rs 36,58,288.
- Maturity value: Rs 66,58,288.
Employees' Provident Fund (EPF)
Contribution Structure
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Both employee and employer contribute 12% of the basic salary + dearness allowance.
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Current interest rate: 8.15% p.a.
Both employee and employer contribute 12% of the basic salary + dearness allowance.
Current interest rate: 8.15% p.a.
Investment and Returns
- Starting monthly salary: Rs 12,500.
- Annual salary increment: 5%.
- Total investment: Rs 30 lakh.
- Total interest earned: Rs 1,09,18,426.
- Maturity value: Rs 1,39,18,426.