PPF vs VPF: Which is Better for Your Long-Term Savings?

PPF vs VPF: Which is Better for Your Long-Term Savings?

When it comes to safe, government-backed investments in India, Public Provident Fund (PPF) and Voluntary Provident Fund (VPF) are two of the most popular options. Both offer attractive interest rates, tax benefits, and long-term wealth-building potential. However, they differ in terms of contribution flexibility, lock-in period, and returns.

In this blog, we will compare PPF vs VPF so you can decide which one suits your financial goals.

What is PPF (Public Provident Fund)?

The Public Provident Fund is a long-term savings scheme backed by the Government of India, available to any Indian citizen.

• Tenure: 15 years (can be extended in blocks of 5 years)
• Interest Rate: 7.1% p.a. for FY 2024–25 (source)
• Minimum Investment: ₹500 per year
• Maximum Investment: ₹1.5 lakh per year

What is VPF (Voluntary Provident Fund)?

The Voluntary Provident Fund is an extension of the Employee Provident Fund (EPF) that allows salaried employees to contribute beyond the mandatory 12% of their basic salary.

• Tenure: Until the employee retires or leaves the job
• Interest Rate: 8.25% p.a. for FY 2024–25 (source)
• Minimum Investment: No fixed lower limit; depends on salary
• Maximum Investment: Up to 100% of basic salary + DA

PPF vs VPF: Detailed Comparison Table

Which One Should You Choose?

• Choose PPF if you want a government-backed savings scheme with a fixed 15-year tenure and are not a salaried employee.
• Choose VPF if you are a salaried employee and want higher interest rates, along with the flexibility to contribute more towards your retirement.

💡 Smart Tip: If eligible, you can invest in both to diversify your tax-saving portfolio and maximize your guaranteed returns.

Example Scenario

If you invest ₹10,000/month:

• PPF @ 7.1% for 15 years will grow to approx. ₹27 lakh.
• VPF @ 8.25% for 15 years will grow to approx. ₹30 lakh.

That’s a difference of ₹3 lakh—just from choosing the higher interest option.

Internal & External Links

• Learn more about EPF and VPF on IndiaLends
• Compare with EPF vs VPF vs PPF
• Check latest PPF interest rates

FAQs on PPF vs VPF

Q1. Can I invest in both PPF and VPF?
Yes, you can invest in both to maximize your savings and tax benefits.

Q2. Which gives higher returns—PPF or VPF?
VPF usually offers higher interest rates compared to PPF.

Q3. Is VPF safer than PPF?
Both are government-backed and very safe; however, VPF is linked to your employment.

Q4. Can I withdraw from PPF before maturity?
Partial withdrawals are allowed after 5 years under certain conditions.

Q5. Is the interest earned on VPF taxable?
Interest is tax-free if your annual PF contribution is within ₹2.5 lakh.

Apply Now with IndiaLends to explore personal loan options while keeping your PPF and VPF investments intact.