EPF and PPF sound alike and both are tax-free, government-backed retirement savings, but they are built for different people. EPF is the workplace provident fund that salaried employees contribute to automatically, with a matching employer contribution. PPF is a voluntary account anyone can open at a bank or post office. If you are salaried, knowing which to prioritise can add up over a career.
EPF vs PPF at a glance
| Feature | EPF | PPF |
|---|---|---|
| Interest rate | 8.25% | 7.1% |
| Tax status | EEE | EEE |
| Who can open | Salaried only | Anyone |
| Mandatory | Yes (basic under โน15K) | No |
| 80C benefit | Yes (employee share) | Yes |
| Employer contribution | 12% of basic | None |
| Maturity | Retirement / resignation | 15 years |
| Premature access | After 5 yrs (conditions) | Partial after 5 yrs |
| Loan facility | Yes | After year 1 |
Why EPF usually wins for salaried workers
EPF beats PPF on rate, 8.25% against 7.1%, and then adds the employer's 12% contribution on top, which PPF simply does not have. For a salaried employee, that combination is hard to beat, and the contribution happens automatically before the money ever hits your bank account. PPF is the next best option for the self-employed, or for salaried workers who want to save more after their EPF contribution. Use the PPF calculator and the salary calculator to see how each fits your numbers.
When to choose PPF
Choose PPF if you are self-employed or a freelancer with no EPF, if you want a guaranteed tax-free account in your own control, or if you have already maxed your EPF and want additional long-term, low-risk saving. Many salaried savers hold both: EPF as the workplace default and PPF for extra retirement money.
Related reading: EPF guide 2026 ยท How to save income tax
Financial Disclaimer: The comparisons on this page are for informational and educational purposes only. Returns, rates and tax rules are subject to change. Past investment performance does not guarantee future results. Consult a qualified financial advisor before making investment or tax decisions. Full disclaimer.
Frequently asked questions
Is EPF better than PPF?
For salaried employees, EPF is usually the better deal. It pays 8.25% versus PPF's 7.1%, and your employer adds a matching contribution on top, which is effectively free money. Both are tax-free under EEE status. PPF's advantage is that anyone can open it, including the self-employed, and it is more flexible on access. So EPF first if you are salaried, PPF for everyone else or for extra saving.
What are the EPF and PPF interest rates in 2026?
EPF pays 8.25% per annum for FY 2025-26, confirmed at the 239th meeting of the Central Board of Trustees in March 2026. PPF pays 7.1% per annum for Q1 of FY 2026-27. EPF is set annually by the EPFO board, while PPF is reviewed every quarter by the Government of India.
Can a salaried person invest in both EPF and PPF?
Yes, and it is common. EPF is mandatory for most salaried employees and is deducted automatically, while PPF is a voluntary account anyone can open. Both employee EPF contributions and PPF deposits count towards the same โน1,50,000 Section 80C limit, so the deduction is shared, but you can still hold and grow both accounts.
Does the employer contribute to PPF?
No. PPF is an individual account that you fund yourself; there is no employer contribution. EPF is different: your employer contributes 12% of your basic salary on top of your own 12%, which is a major reason EPF outperforms PPF for salaried workers in pure rupee terms.
When can I withdraw EPF and PPF?
EPF is meant for retirement and is fully payable when you retire or after two months of unemployment, with partial withdrawals allowed earlier for specific needs like a house, medical treatment or education. PPF runs for 15 years, with partial withdrawals allowed from the seventh year and the option to extend in 5-year blocks afterwards.