Is it better to invest in EPF or PPF.

POSTED BY [email protected] ON April 8, 2012 1:31 pm COMMENTS (12)


I have both EPF and PPF accounts. I was thinking to increase my EPF component but as the EPF rates are slashed, I feel i should deposit that extra amount to my PPF instead of EPF. Please suggest.

Also, when can we withdraw from EPF?
How much can we withdraw?
If i quit my job, can I withdraw the entire EPF amount ?

12 replies on this article “Is it better to invest in EPF or PPF.”

  1. shib4u says:

    My ex-employer in not helping me close and recover my EPF amount… what should I do?

    1. Dear Shib4u, can you please elaborate more on your problems with your ex employer?



      1. shib4u says:

        Hi Ashal,

        There has been no issues as such. I got all the document formalities done while I left the job. The accounts team said that they do not have a Provident Fund Closing form with them at that time and that he’d intimate me and get it done when he gets the form. Its been 2-3 months now and the accounts team has not been responding for this request. On calling them they say, form is not available, or we’ll do it soon etc etc. Mails and sms go answered. What are my options now… can I apply directly and ask for a refund? Thanks for your help.
        I do have the EPF acc. no. on my salary slips and can see the amount when I checked the EPF website.

        1. Ramesh says:

          It is a common problem when one leaves an organization.
          Send them request using registered post regarding this issue, and then tell them you will take legal action, if they do not release it or do the proper procedure.

        2. Dear Shib4u, please check the below link & I think your problem ‘ll be solved. Please apply with your current employer for transfer of your prev. PF.



  2. VSD Drives says:

    should one invest in PPF of FD for better returns, as I am looking for safe investment options ????
    I am not very much impressed with ULIP’s as they charge quite high and hence the actual invested amount becomes quite less!!

    1. Dear VSD Drives, in PPF you can’t invest more than 1L Rs. in a FY but maturity amount is tax free. In case of bank FD, you are free to invest any amount as per your wishes but maturity is taxable. So make your own call, keeping your options suitable for these 2 products.



  3. AB says:

    Thanks justgrowmymoney and Ashal,

    Could you suggest some good MFs to invest in.

    1. Dear AB, if you are investing first time, please start with following 2 funds –

      HDFC Prudence (a balanced fund)
      Quantum Long Term Eq. fund (A conservative multi cap fund)



  4. Dear AB, on liquidity point, both EPF & PPF are poor. On long term wealth creation both are one of the best in Debt space. For current FY i.e. 2012-2013, PF interest rate may be a bit higher one say 8.4 or 8.5% or even 8.6%.

    In case you are leaving your current employer before completion of 5Y, you can withdraw your EPF but it ‘ll be taxable in the year of receipt.

    In my opinion, please do not focus too much on pennies at the start of your career. For your age you should invest a good part of your saving surplus in Eq. MFs for long term wealth creation.



  5. AB – EPF and PPF are excellent ‘silent’ wealth generators.

    Agreed that EPF is at 8.25% (for 2011-12) and PPF is at 8.8% as on today. However even for the previous FY (2010-11) EPF had a 9.5% return. EPF returns have been at 8.5% versus PPF 8% for along time as well.

    EPF may be withdrawn when you switch jobs but if the contributions have not completed 5 years the withdrawal will be taxed. It is never a wise idea to encash your EPF, it must be left to grow until retirement ideally unless there is a ‘real emergency’.

    EPF (VPF) deductions will ensure you get a lower salary in hand (savings is already done) which may help curtail your other expenses. However if 12k is all you intend save each year it makes sense to push them into PPF as the returns are higher. Your EPF will anyway be contributed (12% basic with a minimum of Rs. 780 each month).

  6. AB says:

    Just to add,
    I m doin job for past 3 yrs.
    My age is 25.
    Monthly Sal 35 k
    EPF : 1500 monthly
    PPF : 12000 Yearly (opened in April 2012)

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