Many salaried employees in india rely on the Employees' Provident Fund (EPF) for long-term financial savings and retirement planning. It no longer only gives tax benefits but also will pay a first-rate interest fee that's currently 8.25% for the 12 months of 2024-25.
However, if you've changed jobs recently and have not transferred your vintage EPF account to your new employer, you are probably wondering, will your cash still earn interest? Or are you losing out? permit's discovery in this text.
WHAT happens if you don't switch YOUR EPF ACCOUNT?
When you switch jobs, your time-honored Account Range (UAN) stays the same; however, your EPF account with your vintage business enterprise would not automatically circulate to the brand-new one. You have to transfer it yourself through the
EPFO Member Sewa portal.
Until then, your vintage cash simply sits there. And sure, for a while, it nevertheless earns hobby.
However, for the way, what does interest keep?
In step with EPFO guidelines, hobby is paid on an old or unused (dormant) EPF account for as much as 36 months (3 years) after the closing contribution. If there are not any contributions for 36 months and the worker has retired or left their process, the EPF account becomes inactive and forestalls earning interest.
For instance, if you left your preceding job in 2020 and failed to switch your EPF, that money stopped growing in 2023. You are lacking out on a hobby that could've been constructed up via compounding.
WHY is this a hassle?
Shall we embrace your old EPF account? For three years, it earned no hobby. Meanwhile, your new employer is adding cash to a new account with a smaller stability. So, the hobby you're into also has lower incomes.
On top of that, withdrawals from the old account can be complex, especially if your bank information, Aadhaar, or PAN are not updated. The paperwork can come to be a headache.
How to avoid THIS difficulty
To preserve your retirement cash and avoid any troubles later, transfer your EPF account soon after joining a brand-new process. Test that your Aadhaar, PAN, and financial institution info are correct.
It's miles more useful no longer to withdraw your EPF until you actually need to. Allow it to grow with interest.
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