EPFO came out with the concept of provident fund so as to assist workers in their retired life and the savings will remain as though or you can best take the advantage of the said funds. Only if you follow the below listed pointers:
1. Hold on to the EPF until exceptional need arises: It is best to maintain the corpus as though and even you have the option to transfer funds when you switch job from one employer to other if you seek withdrawal for safety reason. As in a case if you are going to withdraw your EPF corpus accumulated while working with one set up, you are sure to spent it somewhere or the other. Furthermore, the compounding benefit that you reap cannot be ignored.
2. Pension benefit if corpus is not withdrawn until retirement: If the person keeps the EPF account as it is and withdraws funds only upon retirement, he or she also becomes entitled to pension benefits.
3. Interest on interest benefit that augments compounding benefits: If the EPF subscriber holds funds in his or her EPF account, he or she also has a chance to get interest on interest benefit.
4. After retirement withdraw funds from EPF account as else it is subject to taxation: As per the EPFO rule, subscriber should withdraw funds from EPF kitty, and transfer funds to some better avenue, as post retirement, the interest on EPF is subject to taxation.
5. If your PF has become dormant due to job loss, still maintain the a/c: Do maintain funds in it, as interest will still be payable on it until 58 years of age. And EPF provides a decent rate of return. For the FY 2018-19, EPFO decided EPF rate at 8.65%.