income tax (17.5%) is deducted before Mutual Fund contributions while income tax is deducted _after_ provident fund contributions. This means provident fund contributors saved 17.5% on their contributions. E.g. saving 82.5ghc into mutual fund is the same as saving 100ghc into provident fund.
2. Partial withdrawal.
You can not partially withdraw from Mutual Fund but can partially or completely withdraw from the provident fund.
3. Duration of fund.
Even though both funds can be kept till pension, if you want part or all of Mutual Fund, you must exit to claim your funds.
However, you do not need to exit provident fund to access part or all your contributions. You get to enjoy all the tax that was not deducted (17.5%) if you withdraw after 10years.
You would be taxed 15% if you Withdraw before the 10 years. Even that, it’s still Better keeping the 2.5%.
4. Waiting period to access withdrawn funds.
While it can take multiple months to access your Mutual Fund, it takes only week (s) to access your provident fund.
5. Fund management style
While Mutual Fund is managed with public sector mentality, provident fund is managed by private companies with private sector mentality.
Mutual Fund is managed without any clear competitors/competition while provident fund is managed with private sector competitions since all unions/workers have their managers.
7. Return on savings
From start, the provident fund is ahead with the 17.5% tax that was NOT deducted. Secondly, you get to enjoy interest on the tax that was not deducted when it’s invested for you.
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Thirdly, private sector competitive companies definitely produce better results than public sector create and share.
Mutual Fund gives loans while provident fund does not.
If you must take loans from Mutual Fund, do that with minimum mutual fund contributions.
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