Financial Express
- Apr 27

Should salaried employees increase VPF contribution instead of investing in PPF?

Voluntary Provident Fund (VPF) facility is available to salaried employees wherein they can contribute more than 12% of the Basic Pay+Dearness Allowance (DA) towards their EPF accounts. Employees are allowed to contribute up to 100% of their Basic Salary and DA. The interest rate on VPF contribution is the same as the EPF interest rate (currently 8.15%).

As salaried employees also invest in tax-saving schemes like PPF, which is currently offering an interest rate of 7.1%, they often face a dilemma of whether to increase their VPF contribution or invest in schemes like PPF for tax saving and investing for retirement.