VPF- Everyone knows about WPF. But do you know anything about EPF? If not, then this article is made for you. If you are a salaried person and are looking for a strong and safe plan for retirement, then VPF i.e. Voluntary Provident Fund can be the perfect option for you. This scheme is an extended version of EPF, in which there is no limit on investment. Meaning, you can invest as much part of your salary as you want in it.
12% contribution is mandatory in EPF, in which the employer also contributes equally. In VPF, you can contribute up to 100% of your basic salary and DA, above 12%. Suppose your basic salary is Rs 50,000, then you already invest Rs 6,000 in EPF, but by investing Rs 44,000 more in VPF, you can invest a total of up to Rs 50,000. There is no contribution from the employer in this, but the security and return is the same.
The interest rate on VPF is the same as that on EPF, which is currently 8.15% per annum. This is guaranteed and unaffected by the market. Along with this, there is also a huge tax exemption. Under Section 80C, tax exemption of up to Rs 1.5 lakh is available and if you have run the account for more than 5 years, then there is no tax on the maturity amount.
How to start?
To start VPF, you have to talk to your HR or employer. A form has to be filled and you can decide how much to invest every month. You can also increase or decrease this amount later. The money can be tracked on the UAN portal. Money in VPF cannot be withdrawn immediately. It is a long-term investment. However, partial withdrawal is possible for some emergencies like buying a house, education or medical expenses. If you continue this for 10-20 years, then a fund of Rs 50 lakh to Rs 1 crore can be prepared on retirement.
Desclaimer: For any financial invest anywhere on your own responsibility, Times Bull will not be responsible for it.