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Employees' Provident Fund Vs General Provident Fund: Interest Rates And Other Details

There are three major provident fund accounts -- namely EPF, GPF and PPF -- available in the country.

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Employees' Provident Fund Vs General Provident Fund: Interest Rates And Other Details

Interest rates on these provident fund accounts are revised by the government from time to time.


There are three major provident fund accounts -- namely Employees' Provident Fund or EPF, General Provident Fund or GPF and Public Provident Fund or PPF -- available in the country. EPF is a compulsory retirement saving instrument and its contributions are deducted from the salary of individuals. GPF or General Provident Fund is a provident fund account which is available only for government employees and PPF or Public Provident Fund accounts are offered by banks and post offices for general public. Contributions made towards provident fund accounts qualify for deduction in taxable income under the Section 80C of Income Tax Act. Interest rates on these provident fund accounts are revised by the government from time to time.

Here are key things to know about EPF and GPF accounts:

Employees' Provident Fund

Companies employing more than 20 people have to compulsorily make contributions towards the EPF. Both the employee and the employer make equal contributions towards EPF. Last month, the Ministry of Finance approved 8.65 per cent rate of interest on EPF for 2018-19.

EPF account can be closed while quitting a job permanently. It can also be transferred while changing companies till retirement. Partial withdrawal is allowed in case of EPF account under certain circumstances such as purchase/construction of house, repayment of loan, marriage of self/daughter/son/brother or for medical treatment of family members etc.

GPF Account

A government employee becomes a member of GPF by contributing a certain percentage of his/her salary to the account.  As per GPF rules, all temporary government servants after a continuous service of one year, all re-employed pensioners (other than those eligible for admission to the contributory provident fund) and all permanent government servants are eligible to subscribe to GPF. Currently, the rate of interest on GPF is 8 per cent.

A GPF account holder can contribute monthly towards GPF except during the period when the individual is under suspension. Subscriptions to the general provident fund are stopped three months prior to the date of superannuation. On retirement of a subscriber, instructions are issued for immediate payment of the final balance on retirement.



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