Does interest rate increase make EPF an attractive investment option?
Updated : February 22, 2019 01:38 PM IST
The decision to raise the interest rate on EPF by 10 basis points further widens the gap between the rate offered by EPF and that of Public Provident Fund (PPF) that currently offers an 8 percent interest rate.
Both these instruments are used primarily to save for retirement planning and long term saving. A point to note is investments in both these avenues earn taxfree interest.
An employee contributes 12 percent of his basic salary and dearness allowance every month to EPF. The maximum contribution allowed is up to 100 percent of the basic salary and dearness allowance.
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