Provident Fund (PF) gives a higher return on investment when compared to other perceived stable investment opportunities. With the current interest rate of 8.65%, investing in PF is a smarter choice when compared to Fixed Deposits (7.5%), Recurring Deposits (7.5%) and PPF (8.1%).
As a hybrid defined benefits plan, Provident Fund guarantees its investors a defined return rate of return. EPFO members can rest assured knowing that their investments are protected and are not threatened by fluctuations in the market.
Both employer and employee PF contributions are tax exempt, unlike contributions into the equity market or fixed deposits, which are post-tax contributions. Moreover, unlike fixed income returns or equity investment returns, PF withdrawals are tax-exempt (subject to a 5 year period of no withdrawal).