Unfortunately the rate of interest PF Deparment offer is around 8-9% P.A, If we invest the same amount of money in Insurance sector or SIP-Plans my account will appreciate by 20-30% P.A and at the same time advantage of higher insurance cover.Further there is also no transparency to check the PF account status anytime though it is our own hard earned money.Overall the service standard of PF department employees is not at all satisfactory and customer oriented.The amount paid as PF, is also a part of Rs. 100000/- exemption allocated by the government for investments.Employees should be given the option to decide if they want to invest the money through PF Schemes or want take that deduction as part of the salary every month and make investments decision on their own.PF dept/Govt should jut ensure that the company’s pay that amount regularly to the employees.

it is like hidden saving.

so.......what did u intend to ask here??idont see more of a question here....its giving more info..as u told its not a very good investment tool....when compared to other avenues available...but as it is mandatory...nothin can be done about it....Good luck..!!!!Happy investing...!!!!!!

Your observations to certain extent are correct. However, PF yields promised growth by way of interest and the interest earns interest every year. This has got a compounding effect and works out to higher returns in the long run. It is an assured way of you having a savings for future. SIPs returns are based on the performance of the funds in which your funds are deployed by the Fund Managers. It has certain element of risk but better than risking your money in share market. I have my self benefitted from PF scheme over aperiod of 34 years of service. When the offer for pension was announced I surrendered about 3.50 lakhs ie., 50% of the contribution to pension fund and after retirement I have received 4.32 lakhs by way of pension in 3 years. and will get about 1.44 lakhs every year till I reach 75 years. By surrenderingt 3.50 lakhs I have also received commutation amount of Rs.3.96 lakhs when I retired.....What else I want.?So you better continue with the PF scheme and If you have spare money invest in Mutual Funds under SIP