Archive · 2 Sep 2025
EPF vs. Equity: Can EPF Returns Outperform Equity?
EPF (Employees' Provident Fund) and equity investments both aim to grow your money.
The article explores which option is better.
For FY2024-25, EPF offers a fixed interest of 8.25%.
A Chartered Accountant (CA) compared EPF with equity returns over five years, factoring in taxes.
The CA calculated EPF can provide higher returns than equity due to tax advantages.
Even though equity investments provided higher returns, EPF gave better results because of tax benefits.
Basically, EPF can lead to better returns due to tax benefits.
The EPF interest rate is set at 8.25% per annum for FY 2024-25.
Employees contribute 12% of their basic salary towards EPF.
Employers also contribute an equal amount to EPF.
A CA compared EPF and equity returns over five years.
Due to tax benefits, EPF can provide higher returns compared to equity.
- Who
- Salaried Employees
- What
- Comparison between EPF and Equity returns
- When
- FY 2024-25
- Where
- N/A
- Why
- To highlight tax benefits of EPF can lead to higher returns
- EPF Interest Rate (FY2024-25)
- 8.25%
- Employee EPF Contribution
- 12% of basic salary + DA
- Employer EPF Contribution
- 12% of basic salary + DA
- New Tax Regime
- Used by both employees in the example
- CA's Equity Return Estimate
- 11% (post-tax) for the 5-year period
- EPF Corpus after 5 Years
- Rs 17.75 Lakh (8.25% interest)
- Equity Corpus after 5 Years
- Rs 15.75 lakh
Sources
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