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Investments are essential for wealth creation and securing your financial future. There are numerous investment avenues to choose from, some with low risk and some with high. If you are looking for a low-risk option, the Voluntary Provident Fund or the Public Provident Fund are among some of the preferred options.


But choosing between PPF vs VPF can be overwhelming. However, one way to understand which is better is to know what makes them different from each other.


Read on to know the difference between VPF and PPF to help you choose the right instrument.

VPF vs PPF: Comparison





Must be -

  • Salaried Employee

Must be -

  • An Indian Resident

Interest Rate

8.15% p.a.

7.10% p.a.

Maturity Period

Until retirement

15 years


Up to ₹1.5 Lakh

Up to ₹1.5 Lakh



Allowed only after 5 years


To be decided by the employee

₹500 to ₹1.5 Lakhs per annum


Difference Between a Voluntary Provident Fund and Public Provident Fund

Comparing VPF and PPF is the easiest way to understand which option is best for you. Here are some differences between VPF and PPF that can assist you in making the right decision.

  • Eligibility Requirements

For the voluntary provident fund, you must be a salaried employee of a company. Participation in VPF is voluntary, which means you can choose to make contributions towards VPF for additional benefits.


To open a public provident fund account, you need to be an Indian resident. This means that a non-resident Indian is not allowed to open a PPF account. Along with that, Hindu undivided families are also not allowed to open a PPF account.

  • Rate of Interest

The government determines the rate of interest for a voluntary provident fund. The interest rate of a voluntary provident fund is close to the interest rate of an EPF (Employee Provident Fund) since a voluntary provident fund is an extension of the EPF scheme.


The government also determines the interest rate of public provident funds. Currently, the VPF interest rate stands at 8.15% p.a., while it is 7.10% p.a. for PPF.

  • Maturity Period

The maturity period for a voluntary provident fund is generally until you retire from the organisation or till you resign. However, you can continue our VPF account with your new employer.


In a public provident fund (PPF), the maximum duration is 15 years. After that, you also have the option of extending the maturity of your scheme by another 5 years.

  • Tax Implications

You can get tax deductions for the contributions made towards the voluntary provident fund according to the Income Tax Act. These deductions can be claimed up to a specific limit. Remember that the returns earned through your VPF account are taxable if it exceeds a specific limit.


Similarly, you can also get tax deductions for the contributions you make towards the public provident fund according to the Income Tax Act. However, under both schemes, you can avail tax benefits of up to ₹1.5 Lakhs.

  • Method of Contribution

For a voluntary provident fund, you can choose any amount you wish to invest based on your future goals. This simply means you can even deposit 100% of your salary in a VPF account. But remember to assess your finances thoroughly before planning a contribution amount to avoid unnecessary financial burdens. 


The contribution towards the PPF can be started from as low as ₹500 annually. The maximum limit for PPF contributions, however, is ₹1.5 Lakhs annually.

  • Premature Withdrawal

You can prematurely withdraw the investments made towards your voluntary provident fund account to cover any unexpected financial obligations. 


A public provident fund allows you to prematurely withdraw the investments only after 5 years of opening the account. You can withdraw the funds to cover your child’s academic expenses or your medical bills.


A public provident fund (PPF) is a government-backed investment scheme that offers you attractive interest rates and tax benefits with minimal risks. A PPF allows you to invest a specified amount as your contribution and build a corpus over time.


On the other hand, a voluntary provident fund (VPF) allows investment opportunities for employees to contribute an additional portion of their income towards retirement savings. As the name suggests, contribution towards this fund is voluntary.


Both offer great advantages; however, the differences between PPF and VPF can provide an edge to one avenue over the other, depending on your preferences and goals.


This information can assist you in selecting the right kind of provident fund. Both public provident funds and voluntary provident funds have distinct eligibility criteria. So, consider these with your investment goals and timeline to select the right fund option. 


The information provided by BFDL herein above is related to the Non-Partnered Banks/ NBFCs and is just for the purpose of information and under no circumstances the information provided hereinabove is intended to be source of advice or recommending any financial investment advice or endorsement of any sort. 

The information including interest rates with regard to fixed deposit, provided on this website is gathered through publicly available sources over the internet and is considered as accurate and reliable to the best of our knowledge. BFDL disclaims any responsibility or liability regarding inaccuracies, omissions, mistakes etc. as well as offers by the Non-Partnered Banks. The use of information set out is entirely at the User’s own risk and User should exercise due care prior taking of any decision, on the basis of information mentioned hereinabove. You are advised to visit/ contact the respective Banks/ NBFCs to verify the information before making any investment or opening an account. Further, BFDL does not undertake any responsibility or liability to update this information. YOU ARE SOLELY RESPONSIBLE FOR ANY LIABILITY OR DAMAGE YOU INCUR THROUGH ACCESS TO OR USE OF THE SITE OR SUCH INFORMATION OR MATERIALS EXCEPT WHERE THE LAWS AND REGULATIONS OF A PARTICULAR JURISDICTION CONCERNING WARRANTIES CANNOT BE WAIVED. Additionally, display of any trademarks, tradenames, logo and other subject matters of intellectual property owners. Display of such Intellectual Property along with the related product information does not imply BFDL’s partnership with the owner of the Intellectual Property of such products. 

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FAQs on PPF and VPF

Yes, you can have a voluntary provident fund as well as a public provident fund.

While the PPF has an investment horizon of 15 years, the maturity period of a VPF is until retirement.

You can withdraw your voluntary provident fund (VPF) by submitting Form 31 along with supporting documents.

Yes, you have the option of updating your contribution amount towards the voluntary provident fund.

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