EPF vs. Fixed Deposit: Which is the Right Investment this 2019?

Money is a vital factor for survival irrespective of the way you earn them. You can financially look after yourself as well as your family through the regular income you receive every month. But, what about the time when that regular income will cease? Retirement life deserves rest and peace of mind at the same time.

If you manage to save a portion of your earning, you might be able to live peacefully for some time. But, if you rightly invest your money, you can build a sizeable corpus for a peaceful life after retirement. Usually, many employers offer the facility of retirement investment via the Employee Provident Fund (EPF) or Provident Fund (PF).

Provident Fund

EPF/PF is a portion of your salary that is deducted every month. Your employer will give an equal contribution and deposit the sum into your EPF account. Once you retire or leave your job, the accrued amount is paid to you along with a fixed interest rate. Fixed deposits, on the other hand, is an investment option for both short-term and long-term financial goals.

You can open an FD account with a traditional bank or Non-Banking Financial Companies (NBFCs). You got to deposit a lump sum amount to open an FD account and earn interest on it based on your type of customer, deposit amount, and tenor.

EPF vs. FD

Maturity PeriodAt retirement or resignation of the employee7 days to 10 years
Interest RatesFixed and altered by Government (at present it is 8.75%)Fixed and altered by individual banks or Non-Banking Financial Companies (NBFCs) (at present it ranges from 8.75% to 9.10% per annum)
Premature WithdrawalAvailable Available with penalty charges applied
LoansAvailable for certain reasons like education, marriage, medical treatment, purchase of a house, house modifications, home-loan payments, calamities, lockouts, and if you wish to withdraw the money one year prior to retirementAvailable with 90% fund utility allowed
Investment Limit12% of basic salary from the employee and the employer along with Dearness Allowance (DA) per monthNo limits
Tax DeductionAvailable up to Rs 1,50,000 per annum. However, withdrawal of the sum before the completion of 5 years of servicing, no tax deductions are available.Available up to Rs 1,50,000 per annum

What is the Right Choice? EPF or FD?

Investment options need to be selected based on your financial goals, income, and expenditure. EPF could be your mandatory saving from your organization. But, with an additional FD account, you can enhance your retirement corpus and earn more benefits. One of the leading financial organizations, Bajaj Finance has emerged to be a dependable financial provider with CRISIL’s FAAA and ICRA’s MAAA highest rating. Additionally, you can invest your retirement corpus in a senior citizen FD and gain higher FD interest rates. Bajaj Finance offers an array of benefits when investing in an FD, they are:

  • Facility to deposit a sum as low as Rs 25000
  • Guaranteed stable returns on investment without any influence from the market rate fluctuations
  • Gain the highest FD interest rates in India ranging from 8.75 % to 9.10%
  • Choose from a flexible tenor ranging from 12 months to 60 months
  • Enjoy a 0.35% hike in the Senior Citizen Fixed Deposit Interest Rates
  • Calculate FD interest rates and maturity returns with the easily accessible online FD calculator available on the website.
  • Quick online application procedure with nominal document submission
  • Select the frequency of the interest payout from a monthly, quarterly, half-yearly, and yearly basis
  • Avail customer care support round the clock online as well as offline for assistance for any available financial services.

Investing in EPF is based on the organization you work with, but investing in an FD is entirely your decision. You can enhance your retirement corpus and enjoy a stress-free retirement life with Bajaj Finance at your service!

After working 5 years as a Software Analyst in reputed MNC, Rebecca decided to settle down and work from home. Having an expertise in business & being a life motivator, she loves to share similar stuff on our website by the means of her articles.