Due to the downward trend in the interest rates and the power of compounding, today EPF is considered to be one of the best investment options. It is a recommended debt product by financial planners.
The Employees' Provident Fund Organization (EPFO) has crores lying in inoperative accounts. There are chances that a small portion of this unclaimed money is yours.
Many people think documentation and transferring money to EPF account is complicated, and they ignore to transfer the funds to the existing EPF account.
Inoperative EPF account
EPFO does not pay interest on the EPF account, where no contributions or no activity have been received for 36 or more months continuously. EPFO considers this type of account as an ‘Inoperative EPF Account.' There will be no transfer or withdrawn request in these type of EPF accounts.
Interest on Inoperative EPF account
From the financial year 2011-12, the employee's pension body, EPFO decided to stop paying interest on accounts that had been inoperative for more than 3 years, or 36 months. But last year EPFO rolled back the decision to stop paying interest on accounts that had been inoperative for more than 3 years, or 36 months. Now if your account is inoperative for more than 3 years, it will continue to earn interest as it did earlier. When Can You Withdraw Your EPF?
Trace Inoperative account
EPFO has started an online desk to trace all your unclaimed money from the inoperative PF account. For tracing your inoperative account, you should know some basic details of your inactive EPFO Account(s). These details include your EPF number, establishment code, Employer, etc.
If you don't remember these details you can detail in your old salary slips mainly your EPF number. You can also contact your past employer for getting the same.
After finding your EPF details, you can log in to EPFO's helpdesk and start steps to withdraw or transfer that money. But remember, for each inoperative EPFO account you need to fill separate request form online. How To Link Aadhaar With Your EPF Account Online?
EPF interest rate
For salaried people, every month 12% of your salary will be deposited into the EPF account. The contributions made to EPF account compounds at a rate declared by the EPFO every year. Currently, EPF rate of interest is 8.65% per annum.
The contribution of up to Rs1.5 lakh to your Employee Provident Fund account is eligible for tax deduction under Section 80C. The interest accrued is tax-free after 5 years. That is your pension will be tax-free. How To Check Your EPF Balance By Missed Call?