EPF vs. VPF vs. PPF: The Salary Hack Your HR Might Not Tell You About
Thank you for reading this post, don't forget to subscribe!Are you a salaried Indian splitting your savings between an Employee Provident Fund (EPF) and a Public Provident Fund (PPF)? According to Chandralekha MR, Founder of Dime, you might be missing out on safer, higher returns.
Her advice is clear: Skip PPF and maximize your savings with the Voluntary Provident Fund (VPF) instead.
Here’s why VPF is the superior choice for salaried employees, based on her breakdown:
The Funds Compared
| Fund | Who It’s For | Interest Rate (Tax-Free) | Contribution/Limits | Key Takeaway |
| EPF (Employee Provident Fund) | Mandatory for Salaried Employees | 8.25% | Employee (12% of basic) + Employer match | Your bedrock retirement savings. |
| VPF (Voluntary Provident Fund) | Salaried Employees Already in EPF | 8.25% | Optional, above EPF contribution. Tax-exempt up to ₹2.5 lakh per year. | The ‘hack’: Higher returns with no extra account to manage. |
| PPF (Public Provident Fund) | Open to All (especially self-employed) | 7.1% | Max limited to ₹1.5 lakh per year. | Better suited for the self-employed or business professionals in high tax brackets who lack EPF access |
The Verdict: Why VPF Wins for You
The core idea is simple: as a salaried employee, you can access two high-return, tax-free options, but only VPF gives you the best of both worlds—higher interest than PPF (8.25%) and the convenience of building directly on your existing EPF structure.
VPF is the perfect, seamless tool for those looking to save more and earn a better, tax-free return than what PPF currently offers.
