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In the past maximum are of rural background so there is no thought of savings for future and now there is a lot of urbanization and the employees are increasing and those thinking of their future after retirement are 25 years old, so they are interested in saving schemes like PPF and EPF, saving schemes related to EPF and PPF gives good returns and benefits.
PPF (Public Provident Fund) scheme
The scheme is of long period of 15 years, if you are employed then PPF is a good way of investing and it can also be extended for 5 more years, in with extraction of extra money from Investment they can also receive interest, Interest rate from July 1, 2017 is 7.8%, a minimum of Rs. 500 per capita per annum can cost upto 1.5 lakhs, the average interest rate is 8% on average, there is no chance of closing the account within the deadline.
But at the end of the sixth year, as soon as the seventh year enters, some amount may be withdrawn, it is only allowed to withdraw 50 percent of the balance sheet from the end of the fourth year, rather than the balance in the PPP account, these are exempted from taxes, EPF and VPF are limited to organized sectors and PPF is available for every one.
Benefits with PPP
A person can get a low interest loan on PPF, the interest rates are just 2 percent above PPF interest, after some time there is no need of paying interest on amount, it is to be paid before 5th of the month, the PPF should be taken as early as possible.
EPF (Employee Provident Fund)
It is a government scheme for private companies employees to save money for future to get as retirement fund, this scheme is under central government, the current interest rate is 8.8 percent, Employee Basic + DA will add 12% of the amount from the employee to the EPF excluding the employee from the employer’s salary every month.
Similarly, the respective company also deposits the amount (12%) on the employee’s behalf to the employee’s future fund account, this will provide a monthly amount to retire employees, there is no tax exemption for EPF.
Voluntary Retirement Fund (VPF)
This is only available to EPF subscribers, VPF is not a special scheme, if the EPF subscribers want to save some more from their salary, the VPF will enable it, employee can save on VPF up to its basic level + DA level.
When it comes to Employees
VPF offers a high interest rate, the central government has recently made a decision on paying tax on 60% of the amount withdrawn after retirement from the deposited in EPF as share holding, if decision is taken by on for future, tax paying then investing VPF is the best.
VPF is used for saving amount monthly, the employee have to disclose their companies HR department, if the employee has existed a company then EPF and VPF can be withdrawn, money can be taken back for weddings, buying house and others, PPF and VPF are best for high interest rates, but PPF is the only best thing or only best option for small companies.