NPS vs. VPF: Know which option is best for you before planning for retirement—a complete breakdown of returns and tax implications..

Investing in the right avenues is crucial for ensuring financial security in old age and leading a comfortable life after retirement. When it comes to retirement savings, salaried individuals generally consider two major and popular options: the Voluntary Provident Fund (VPF) and the National Pension System (NPS).

Voluntary Provident Fund (VPF)
VPF is essentially an extension of your existing EPF (Employee Provident Fund). While 12% of your basic salary is deducted for EPF, you can voluntarily contribute up to 100% of your basic salary and Dearness Allowance (DA) towards VPF.

1. It offers the same interest rate as the EPF, which is currently set at 8.25% per annum.