The provident fund is an essential part of an employee’s financial planning for retirement. In our country, there are three main types of provident funds: Employees Provident Fund (EPF), Public Provident Fund (PPF), and General Provident Fund (GPF).
Employees Provident Fund (EPF): EPF benefits are available to private sector employees with over 20 employees and a basic income of up to 15,000. Both the employer and the employee contribute 12% of the basic salary.
The EPF offers benefits such as total withdrawal at retirement, regular pension under the Employees Pension Scheme (EPS), and insurance benefits under Employees Deposit Linked Insurance (EDLI). The EPF interest rate is typically higher than that of GPF and PPF.
Public Provident Fund (PPF), a fund for all: Individuals with PAN cards can open a PPF account and deposit up to Rs. 1.5 lakh annually. The PPF account has a maturity period of 15 years, which can be extended in blocks of 5 years.
The PPF, with its higher interest rate than fixed deposits, offers a flexible approach to retirement planning. You can withdraw the entire amount at maturity or extend the account for 5 years, giving you control over your financial future.
General Provident Fund (GPF): GPF is available to government employees who joined before December 31, 2003, and receive pension payments under the Old Pension Scheme (OPS).
Government employees can contribute at least 6% of their salary. GPF offers benefits such as higher interest rates than fixed deposits and the option to withdraw the deposited amount in a lump sum at retirement.