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Types of Provident Funds in India 

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December 15, 2022


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If you're a working professional in government services or the private sector, you would have noticed a salary slip deduction with the letters PF next to it. 

This blog will unravel the four types of provident funds in India and the Employee Provident Fund (EPF) in India.

What is a Provident Fund?

A provident fund is an investment fund set up to save for long-term goals such as retirement. In India, we have different types of provident fund plans for individuals from various categories of employment, such as self-employed, private sector employees, and government employees.

What Are the Different Types of Provident Funds in India?

You may be eligible for different provident funds depending on the nature of your employment. Here is a preview of the common types of provident funds available in India.

  1. Statutory Provident Fund
  2. Recognised Provident Fund
  3. Unrecognised Provident Fund 
  4. Public Provident Fund

1. Statutory Provident Fund

  • Also known as the General Provident Fund (GPF), the Statutory Provident Fund was set up under the Provident Funds Act 1925. It's primarily intended for government employees, accredited educational institutions and universities, the railways, and other specified organisations.
  • Eligible employees' contributions to the SPF or GPF account earn interest at the rate fixed by the government. This rate may be periodically revised. As of November 2022, the interest rate is 7.10% per annum.

2. Recognised Provident Fund

  • This type of provident fund pertains to employees of private organisations with more than 20 employees. Here, companies and establishments can either set up their own PF trust or they can choose to join an existing government-approved scheme.
  • If an organisation chooses the former course of action, the PF trust they set up should be approved by the Commissioner of Income Tax (CIT).

3. Unrecognised Provident Fund

In the above case, if the Commissioner of Income Tax (CIT) disapproves of the provident fund scheme, it becomes an unrecognised fund.

4. Public Provident Fund

  • As the name indicates, this provident fund is available to the general public. You can invest in the PPF scheme irrespective of the nature of your employment. It means you can invest in PPF if you are salaried, self-employed, or even unemployed for a while (as long as you have the funds to invest).
  • The investment tenure of this option is 15 years, and you can contribute as little as ₹500 or as much as ₹1.5 lakh each year.

What is an Employees' Provident Fund (EPF)?

  • You may have heard of EPF or the Employees' Provident Fund as a part of your salary discussions at work. It is the most common kind of recognised provident fund. Nearly all private sector organisations with 20 or more employees typically enrol in this EPF scheme.
  • For EPF, the rate of returns on the balance in your EPF account depends on the prevailing interest rate. As of March 2023, it is 8.15% per annum.
  • Typically, each month, the employer and the employee contribute equally to the employee's EPF account. The percentage of contributions and the accounts they are directed to are as follows, depending on the employee's salary:

A. EPF Contribution: If your salary is ₹15,000 or lower

Here, the contribution will be distributed between the Employees' Provident Fund (EPF) and the Employee's Pension Scheme (EPS) as follows:

Employee contribution to EPF: 12% of salary
Employer contribution to EPF: 3.67% of salary
Employer contribution to EPS: 8.33% of salary, up to a ceiling of ₹15,000 on the salary (i.e. ₹1,250)

B. EPF Contribution: If your salary is more than ₹15,000

In this case, the contribution will be distributed between the Employees' Provident Fund (EPF) and the Employee's Pension Scheme (EPS) as follows:

Employee contribution to EPF: 12% of salary
Employer contribution to EPF: 3.67% of salary
Employer contribution to EPS: ₹1,250
Additional employer contribution to EPF: (8.33% of salary) minus ₹1,250

Ready to Calculate your EPF?

Here is a blog that takes you through using an EPF calculator and understand your EPF contribution.

Use this calculator to see how much your contributions will be worth at the time of your retirement.


Provident funds are investment funds for long-term savings, particularly for retirement. In India, various types of provident funds exist based on employment categories, including Statutory Provident Fund, Recognised Provident Fund, Unrecognised Provident Fund, and Public Provident Fund. The most common type is the Employees' Provident Fund (EPF), prevalent in private sector organisations. Understanding these funds is essential for effective financial planning and a secure future.

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Frequently Asked Questions

1. What is the meaning of a Provident Fund in salary slips?

If you are a private sector employee, the term 'Provident Fund' in your salary slip typically means EPF of Employees' Provident Fund. It is a provident fund where the employee and the employer make equal contributions to the account throughout the employee's working years — thus leading to a sizeable corpus by the team an employee retires.

2. How do I withdraw my Provident Fund investment?

Depending on the conditions you fulfil, you can make a partial withdrawal or a complete withdrawal from the Employees' Provident Fund (EPF). Whatever the nature of your withdrawal, you can proceed by applying online or in person.
A partial withdrawal is permitted for specific purposes such as medical needs, wedding costs, educational expenses, land purchases, etc.
On the other hand, you can effect a complete withdrawal when you retire or have been unemployed for more than two months.

3. What is different between a Recognised Provident Fund and an Unrecognised Provident Fund?

Recognised Provident Fund (RPF) is registered with EPFO and follows tax rules. Meanwhile, an Unrecognised Provident Fund (URPF) doesn't do so. Contributions to RPF are tax-deductible, while contributions to URPF are not. Withdrawal, portability, and employer contributions are the other differences between RPF and URPF.

4. What is EPF, and what are its benefits?

The Employees' Provident Fund (EPF) is a retirement benefits scheme managed by the EPFO in India. It is a mandatory savings scheme for salaried employees, where a portion of their salary is contributed towards this scheme each month. The EPF provides employee benefits such as retirement savings, financial security, and life insurance.

5. Who is eligible for an Employee Provident Fund?

In India, the following individuals are eligible for the Employee Provident Fund (EPF):

  • Employees earning a basic salary of up to ₹15,000 per month must contribute to the EPF scheme. However, employees earning more than ₹15,000 per month can also enrol voluntarily.
  • EPF is mandatory for employees working in specific industries.
  • EPF also applies to all employees in private sector establishments (with 20+ employees) and many public sector undertakings.


Fi Money is not a bank; it offers banking services through licensed partners and investment services through epiFi Wealth Pvt. Ltd. and its partners. This post is for information only and is not professional financial advice.
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