Only after a period of say 3 years, the retirement fund body again changed its decision last year and is now offering interest rate return even on EPF account which are inoperative or dormant for more than 3 years. The earlier move to stop any interest payment on such inactive account was made to stop subscribers' careless approach towards the same.
Current Interest of 8.6% stands applicable for inoperative accounts as well
For cases where the account has remained inactive i.e either no contribution has been made or amount has been withdrawn, the department has decided to provide return until the retirement of the person. And in a case when the individual maintaining the EPF account retires and even does not withdraws the amount, in such a case after three years, the account shall be deemed inoperative and interest income shall no more be paid on it.
Also, given the interest rate regime in the country today which is trending southwards; EPF offering a rate of 8.6% is a handsome avenue providing returns. Plus the added advantage of compounding over the years is an add on to the corpus which should be kept intact until maturity or retirement as it shall serve to meet your expenses during those sunset years.
Given the sizable amount which it can accumulate; owing to the principal amount i.e 12% of your basic pay contributed by you as a service class employee and a same amount by your employer plus the returns by way of interest, currently EPF account is also one of the best investment options.