Difference Between GPF, EPF, and PPF

Difference Between GPF, EPF, and PPF

GPF or General Provident Fund is a savings scheme available to government employees. EPF or Employees’ Provident Fund is a savings scheme available to employees in companies with more than 20 workers. PPF or Public Provident Fund is available to everyone – whether employed, self-employed or unemployed.

EligibilityOnly govt employeesOnly organised sectorAll resident Indians
Interest Rate7.9%8.65%7.9%
Maturity PeriodAge of retirementAge of 58 years15 year term
Premature ClosureOn leaving govt serviceOn 2 months of unemploymentAfter 5 years on medical grounds and children’s higher education

Savings plays a critical part in an individual’s financial standing. It bolsters one’s financial footing and creates a stable ground for times when a person is out of income. On that note, it is particularly important to create a substantial corpus for one’s post-retirement life.

Keeping that in perspective, the Indian government has introduced Provident Funds (PFs). In India, there are three types of provident funds, namely – General Provident Fund (GPF), Employees’ Provident Fund (EPF), and Public Provident Fund (PPF).

General Provident Fund (VPF)

GPF is exclusively available for the government sector employees. Individuals employed with the Government of India contribute a minimum of 6% of their salary and are entitled to the accumulated funds at the time of the superannuation or retirement.

All the temporary government servants after a continuous service of one year, all permanent government servants, and all re-employed pensioners (other than those eligible for Contributory Provident Fund) are mandatorily required to subscribe to the GPF.

GPF is managed by the Department of Pension and Pensioner’s Welfare under the Ministry of Personnel, Public Grievances and Pensions.

At the time of GPF subscription, the subscriber can nominate one or more than one persons, conferring them the right to claim for the fund in case of the death of the GPF holder.

The interest rate on the GPF funds is revised by the government from time to time depending on the prevailing market interest rate. As per the latest notification, the government has decreased the rate of interest on GPF by 0.10%.

Each provident fund that is mentioned above promotes the practice of savings when an individual has a regular source of income. This helps to accumulate sufficient funds that can be used to meet expenses when one is out of income. However, there are also several basic differences between EPF and GPF, and PPF that an individual must duly consider.

Qualification measures for GPF

The accompanying people can open a record under the General Provident Fund plot –

Changeless government workers.

Impermanent government workers after a consistent assistance of one year or more.

Re-utilized retired people (gave such beneficiary is ineligible to Contributory Provident Fund).

Government workers qualified for the General Provident Fund need to contribute at least 6% of their pay toward GPF. The most extreme sum an individual can contribute rises to 100% of his/her pay.

Commitment to GPF must be halted on account of suspension or retirement. Such commitment is typically halted 3 months preceding when an individual is scheduled to resign, as indicated by the GPF rules.

Duty exceptions

GPF is a tax-exempt retirement-cum investment funds plot. In this manner, the commitments, premium earned on it just as the profits from a GPF account are excluded from charge counts under Section 80C.

Open Provident Fund

Rather than General Provident Fund, PPF fills in as a reserve funds plot for anybody ready to secure their commitments for a drawn out period. In any case, like GPF, the financing cost on Public Provident Fund is reexamined each quarter by the Government of India.

For the first Quarter of Financial Year 2020 – 21 (April – June) the pace of enthusiasm on PPF has been set at 7.1%. Intrigue count under the PPF plot depends on the lower balance in the middle of what is appeared at the fifth day’s end in a month and its the most recent day. In this way, any store that is made after the fifth of any month is excluded for intrigue estimation for that month.

Qualification rules for PPF

The accompanying classification of people can hold a record under the Public Provident Fund –

Any occupant person who is an Indian resident.

NRIs who opened a PPF account before leaving India.

Minors gave their watchmen/guardians to speak to them.

Also, it will be noticed that any individual can’t hold a PPF account together. Nor is it took into consideration one individual to hold various PPF accounts.

A PPF account holder can just make a limit of 12 commitments in a year. An individual needs to make a base commitment of Rs.500 every year. Be that as it may, the most extreme sum that an individual can contribute, both for themselves and their minor, can’t surpass Rs.1.5 lakh. The commitment is an essential purpose of contrast among PPF and GPF.

Comparison between PPF and GPF

  • GPF and PPF eligibility: Both salaried and self-employed individuals can invest in PPF while only government employees can invest in GPF. Government employees who are residents of India can invest in GPF, only if they have joined the service before 1 January 2004. Any Indian citizen aged 18 years and above can invest in PPF. Only one PPF account can be opened and maintained per individual except for accounts that are opened on behalf of minors. Non-Resident Indians (NRIs) and Hindu Undivided Family individuals are not eligible for PPF.
  • GPF and PPF contribution: GPF account holder contributes 6% of his or her salary in regular instalments for a certain period. The government also contributes 6% of the employee’s salary to the account. A minimum investment of Rs.500 should be made per financial year and up to Rs.1.5 lakh can be deposited in a PPF account in a year. Deposits can be made in a maximum of 12 instalments in a year.

Lock-in period

Another vital distinction among GPF and PPF is the period for which a record holder is ordered to secure their commitment. A PPF account should be kept up for a long time from the date of record opening.

For example, if Rupa opened a PPF account on fifteenth May 2020, her PPF record would develop on fifteenth May 2035.

Upon development, an individual can choose to expand the lock-in period by a square of 5 years, and it tends to be proceeded in such square length from subsequently.

Tax reductions

The stores made each year toward a PPF account are qualified for charge exception up to Rs.1.5 lakh under Section 80C of the Income Tax Act. In addition, the premium earned on the parity sum in a PPF account alongside the development esteem is absolved from tax collection.

Representatives’ Provident Fund

Representatives’ Provident Fund is a retirement-cum investment funds plot like GPF. Notwithstanding, dissimilar to GPF, an EPF is compulsory for those working in an association with in excess of 20 representatives.

The parity in an EPF account accumulates intrigue dependent on the rate set by the Employees’ Provident Fund Organization. For the current budgetary year, the financing cost is set at 8.5%. This intrigue is determined month to month and moved to a person’s EPF account toward the finish of consistently.


The difference between EPF and GPF as well as PPF are summarised in the table below.

ParametersGeneral Provident FundEmployees’ Provident Fund Public Provident Fund
EligibilityGovernment employeesAnyone working in an organisation with more than 20 employeesAny Indian citizen
MaturityUntil retirementAge of 58 years15 years from the date of account creation
Premature closeOn suspension or resignation from government serviceWhen the account holder is unemployed for 2 months or moreAllowed after completion of 5 years on a child’s education or medical reasons

Qualification rules for EPF

EPF has a solitary rule, for example the representative ought to have a place with an association that utilizes at least 20 people.

On account of EPF, both the business and representative are required to add to such a worker’s EPF account. The standard commitment from the two players is 12% of the worker’s pay (essential + dearness remittance). Be that as it may, as of late the administration decreased the EPF commitment to 10% for the two bosses and workers from June to August 2020.

Tax reductions

In the event that an individual pulls back the equalization sum from his/her EPF account following 5 years of record creation, it is absolved from charge. Besides, commitments made in an EPF account each year up to Rs.1.5 lakh are qualified for charge exceptions under Section 80C of the Income Tax Act, 1961.

GPF versus PPF versus EPF

The contrast among EPF and GPF just as PPF are summed up in the table underneath.

Parameters General Provident Fund Employees’ Provident Fund Public Provident Fund

Eligibility Government employees Anyone working in an association with more than 20 employees Any Indian resident

Maturity Until retirement Age of 58 years 15 years from the date of record creation

Untimely close On suspension or abdication from government service When the record holder is jobless for 2 months or more Allowed after finishing of 5 years on a youngster’s instruction or clinical reasons

These are the basic contrasts among EPF and GPF and PPF. It is pivotal for one to know about these distinctions to augment their advantages from every one of these contributory plans.