A Provident Fund (PF) is a government sponsored investment instrument.
With Employee PF (EPF), 12% of your basic salary automatically gets invested. Your employer also contributes 12% of your salary into your PF account.
You can also voluntarily increase the contribution and this called VPF.
Outside of this you can also open a Public PF (PPF) account with any bank and contribute upto Rs 1.5 lakhs per year.
All are great options to invest as the entire interest income is tax free. Some people may complain of lock in issues but then you get to invest in risk free instrument and get a tax advantage!
One mistake people do is to withdraw from their EPF account instead of rolling it over to the new employer. Better to avoid that.
Happy Investing!
