The above stated EPF vs VPF vs PPF pointers offer comprehensive clarity regarding the best investment option to ensure maximum security post-retirement.
While Employee Provident Fund (EPF) is compulsory in India among the three, Voluntary Provident Fund (VPF) seems to be the best investment tool.
VPF extends the highest interest rate and EEE (exempt-exempt-exempt) tax benefits like EPF. Besides, you can be rest assured of guaranteed returns. Individuals looking for long-term investment options involving less risk can opt for this scheme.
However, only salaried employees are eligible to invest in this scheme. In this regard, the Public Provident Fund (PPF) is an attractive option for non-salaried individuals. But it too comes with a limitation. Individuals can only contribute up to ₹ 1.5 lakh in PPF annually.
If you are a salaried employee and earn higher salaries, you can opt for both the schemes as PPF and VPF are fixed income investment tools with tax-free returns.
Nevertheless, in 2021, the Union Budget implemented the latest Provident Fund condition. According to this term, if the investment in VPF and PPF collectively exceed over ₹ 2.5 lakh in a financial year, the returns earned will not be exempted from tax.
Therefore, it is ideal for gaining in-depth clarity regarding EPF vs VPF vs PPF before starting your investment journey for a smooth post-retirement life.