Mandatory contribution made by the employer as well as employee - 12% of salary + Dearness Allowance
8.65% for FY 2018-19
6.50% – 8.25%
The employee’s contribution to EPF every year is exempt from income tax, under Section 80C. Also, the interest earned is tax exempt.
Tax deducted at source is applicable
Therefore, investing in EPF is a better option if the individual has a long-term horizon in mind since it provides tax benefit and aids in retirement corpus creation, and no such tax benefit is available in the case of FDs. However, if an individual wants to invest for a short term, FDs might be better.