Employee Provident Fund or EPF targeted to build a retirement corpus for a salaried person continues to earn interest on EPF account balance even when there are no fresh contributions (for reasons such as employee would have left his or her job) until the subscriber attains 58 years of age. And this is by far the most lucrative investment avenue that earns the highest rate of return among small savings schemes. For the FY 2019-20, interest @ 8.5% per annum has been decided for the EPF account.
Now as per the EPFO which manages EPF, there are certain instances when EPF account will not fetch you interest income:
Here are listed all such situations:
1. When the EPF subscriber retires from his or her occupation after 55 years of age
2. When the EPF subscriber dies
3. When the EPF subscriber shifts abroad on a permanent basis
4. When no request has been made for claiming EPF proceeds for 36 months time from the date the amount became payable on cessation of employment. And hence to continue receiving interest on your EPF balance it shall be wise to make small withdrawals regularly such that the account is not rendered inoperative.
It is to be noted that as and when the EPF account becomes inoperative, the EPFO will stop paying you further interest from that date.
Also, while the accumulated balance in your EPF account up to the date of retirement or cessation of job will not be taxed, any interest earned on EPF balance after you retire or resign from your job will have tax implication.