What Do GPF, EPF and PPF Mean and How You Can Subscribe to Them
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What Do GPF, EPF and PPF Mean and How You Can Subscribe to Them

Always read the fine print carefully before deciding to make an investment in any of these schemes.

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General Provident Fund (GPF), Employees’ Provident Fund (EPF), and Public Provident Fund (PPF) are all various savings schemes available to Indian citizens. While some are strictly for government employees, others can be availed by all; whether employed or not.

In this article, we look at these schemes and understand the differences to find the one that suits you the most.


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General Provident Fund (GPF)

• This scheme is available only for government employees
• The scheme guarantees an interest rate of 7.9 per cent, however it is subject to market conditions
• The scheme matures at the time of retirement
• The subscriber can nominate one or more persons in case of death of the holder
• The contribution rate needs to be at least 6 per cent of the total emoluments of the employee and can go upto 100 per cent of the emoluments
• For certain predefined grounds including education, medical emergency, marriage and for buying a house or consumer durables, the subscriber can avail a refundable advance
• If an employee quits the job at any stage, he becomes eligible to withdraw from the scheme irrespective of his service tenure
• Contributions made towards this scheme are exempt from income tax deductions
• This is mandatory for all government employees

Employee Provident Fund (EPF)

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• This is a govt.-backed saving scheme
• Any organisation that has 20 or more employees have to mandatorily be registered under the EPF scheme
• The scheme matures when the employee reaches 58 years of age
• Employees need to contribute 12 per cent of their basic salary towards this scheme
• While the current interest rate is fixed at 8.55 per cent, this varies according to the market conditions
• EPF amount may be withdrawn on grounds of: loss of job, medical emergency, education, marriage etc.
• The EPF contributions and the interest income are both tax exempted
• You can withdraw or transfer your PF account via this website

Public Provident Fund (PPF)

• This is a government-guaranteed long-term-saving-cum-tax-saving scheme
• Can be subscribed by both salaried as well as self-employed individuals having business income
• Voluntary decision to enroll for this scheme
• The contributions to this scheme is made only by the subscriber
• A minimum amount of Rs 500 is needed to avail the benefits of this scheme
• One can make contributions to PPF in a lump-sum or in a maximum of 12 installments per year.
• While the interest rate is currently fixed at 8 per cent, this varies according to the market conditions
• The interest is calculated on the lowest balance between 1st and 5th of every month. Therefore, one should ideally make contributions before the 5th of the month towards the PPF account.
• There is a lock-in period of 15 years for this scheme
• Premature closure of the PPF account is permissible in case of serious ailment or the further studies of children

Read the fine print carefully before deciding to make an investment in any of these schemes.


Also Read: Ex-Investment Banker Starts Farm to Grow Residue-Free Fruits, Now Earns Lakhs From Exports!


(Edited by Saiqua Sultan)

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