There are people among us who are still confused about what’s the difference between employees’ provident fund and public provident fund. There are many salaried people who are still in confusion as to whether they are to invest the PPF to. The main confusion lies where the people don’t have an idea about what’s the difference between the recurring deposits in the bank and the public provident fund account.
Provident fund is generally related to elderly people and is being started at the tie when a person starts his or her career. There is no necessary amount that a person has to deposit in the account, the amount deposited can vary. This is a kind of investment that is generally done on a monthly basis. The main purpose of the investment to secure the future that is the amount that is being deposited by the people for the whole of their lives are being withdrawn at the age of retirement. There are many people who are investing in this fund and all the money invested by the people is being invested by a trust all together. Whereas on the other hand when we talk about Employee Provident Fund it is being governed by the employeeprovident fund organization of India. It is nothing but a kind of security that is being given by the employer to his employee and any company who has employees more than twenty in number is required to register itself with the organization. It is not that a person changing job has to start again with the contribution to the fund it will automatically get transferred to the new company.
There is a limit prescribed to the contribution to the Public Provident Fund. A person has to pay a minimum of five hundred if one wishes to start contributing to the account and whatever the case may be he cannot exceed the amount of seventy thousand per year. Where as in case of EPF it is totally dependent on the salary that is being drawn by the person as the contribution towards the EPF is always as a percentage of the salary. The normal criteria towards the contribution to the account are 12% of Basic, DA and cash food allowances.
There are some unique features that are being related to the Public Provident Fund Account that is a father whose children’s are yet to attain the age of eighteen can have only one account together with the children’s. Another unique feature assigned to the fund is that the amount invested in the fund cannot be attached to the assets of the individual if the person has got insolvent.
EPF and PPF are the investments that are mainly meant for the long term investment. It’s upon the person to decide whether he wants to invest in the PPF account but in case of EPF a salaried person has no option but to invest in the same. Both the investment has a light difference in the rate of return.
