Voluntary Provident Fund (VPF), also known as Voluntary Retirement Fund, is a safe and lucrative saving scheme. Here, employees make a voluntary fund contribution towards their Provident Fund (PF) account. The contribution amount is fixed by the employee, who also retains complete control over his/her VPF account. The maximum contribution a person can make is up to 100% of the Basic Salary and DA (Dearness Allowance). The current rate of interest is same as that for EPF (Employee Provident Fund). The current VPF interest rate is 8.50% per annum.
In the post below, we will discuss Voluntary Provident Fund features, tax benefits, eligibility criteria, documents required, how to open the VPF account, interest rate, interest calculation, benefits, withdrawal terms and conditions, how to withdraw funds, and FAQs.
Below-given are VPF features:
When it comes to investments, a VPF account is safest and the best because it helps to save tax:
So, you must wonder who exactly can invest in this fund account. VPF is like an extension to EPF. Here, only salaried individuals who receive a regular monthly payment in a specific salary account, are eligible to make a contribution to VPF. Also, the employer must be eligible for EPF facility.
Below given are the documents for Voluntary Provident Fund account:
It is easy to apply for Voluntary Provident Fund Account. Here are the steps to it:
Investment and saving for this type of account is preferable because of tax benefits and high rate of interest. The interest rate may change or remain constant as per the laws directed by the Indian Government on a financial year basis. Here are the details about VPF interest rates and their comparison with PPF interest rates:
The interest amount is credited to the account based on the monthly running balance. This is in effect from the last day of every year in the following way:
Below-mentioned are benefits of VPF:
One can make complete withdrawals or take a loan against VPF contributions. Here are the terms and conditions related to VPF withdrawals:
Here is the process of withdrawing money from Voluntary Provident Fund Account:
Here are the VPF FAQs:
The ideal candidates to open a VPF account are the ones looking for long-term financial investment. This account is suitable for those who are nearing retirement. This account is also feasible for those individuals who want a safe, secure, and a scalable pension fund alternative.
Employees who work on a company’s payroll are eligible to open a Voluntary Provident fund account. The company should be recognized by the EPFO Employees’ Provident Fund Organization of India.
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