PPF or VPF: Where will you get the highest interest, in which to invest money to save tax?

Ronit Kawale
Ronit Kawale - Senior Editor
3 Min Read


You can invest in both PPF and VPF to save tax.
The interest rate available in VPF is 8.15% which is 1% more than PPF.
VPF is a great option to invest for retirement.

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New Delhi. The current financial year is going to end on March 31. In such a situation, efforts to save tax have started. You can save income tax by investing till 31st March. If you are planning to invest somewhere, then investing in Public Provident Fund (PPF) and Voluntary Provident Fund (VPF) can be a good option.

Let us tell you that at present the interest on PPF is 7.1% while on VPF the interest is 8.25%. Let us know where it would be better to invest among these two.

Who can invest in PPF and VPF?
Any Indian citizen can invest in PPF. At the same time, only salaried employees who have an Employees Provident Fund (EPF) account and regularly contribute to EPF can open an account in VPF. This is not a new type of investment but an extension of your EPF account. Since it is voluntary, the contribution for VPF will be in addition to the 12% mandatory contribution for EPF. It is important to note that VPF is exclusively available to salaried individuals, whereas investment facility in PPF is available to both salaried and self-employed individuals.

PPF and VPF- How much can you invest?
You can open a PPF account with just Rs 100. Keep in mind that you have to deposit a minimum amount of Rs 500 in a financial year. You can invest a maximum of Rs 1,50,000 in PPF in a financial year. However, there is no minimum amount or minimum annual investment limit for VPF. You can contribute up to 100% of your basic salary by combining EPF and VPF.

PF or VPF – Where is investment beneficial?
According to experts, your choice between VPF and PPF depends on factors such as eligibility, personal preferences and long-term financial goals. If you are saving for retirement, VPF can be a better option as currently the interest rate on VPF is 8.15%.

At the same time, interest is being given on PPF at the rate of 7.1%. That means, 1% more interest can be availed on VPF as compared to PPF. VPF is a better option to invest for retirement. Click here to read similar news related to money and personal finance.

Tags: Business news in hindi, Income tax, Tax savings

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