PPF vs VPF: Interest, Tax and Lock-in Compared
Updated 5 November 2026
VPF pays more (8.25% against PPF's 7.1%), but only salaried people with EPF can use it, and the money stays locked till you leave the job or retire. PPF is open to everyone, with a 15-year term.
Side by side
| PPF | VPF | |
|---|---|---|
| Interest rate | 7.1% (October–December 2026) | 8.25% (FY 2025-26) |
| Who can open | Any resident Indian | Salaried employees with EPF |
| Yearly limit | ₹500 to ₹1.5 lakh | Up to 100% of basic + DA |
| Lock-in | 15 years; partial withdrawal from year 7 | Till you leave the job or retire, with some exceptions |
| Tax on interest | Fully tax-free | Tax-free; interest on your own contributions above ₹2.5 lakh a year is taxable |
Which should you pick?
- Salaried and want the highest safe rate: VPF.
- Self-employed, or want an account that stays when you change jobs: PPF.
- Many people use both: VPF for retirement, PPF for a 15-year goal.
Try it
Open the PPF calculator and enter your own numbers. Words you don't know are explained in the money glossary.