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EPF : EPFO (Employees’ Provident Fund Organisation) opens EPF accounts for employees, and every month, a portion of the employee’s salary is deducted for the Provident Fund. However, many employees are not fully aware of the benefits they receive from their Employees’ Provident Fund accounts.

For every employee whose EPF is deducted monthly, there are 7 benefits that provide financial security not only to the employee but also to their family. Let’s take a look at these benefits.

1. Pension Benefit

EPF money is divided into two parts every month: one part goes into Employees’ Provident Fund and the other part into EPS (Employees’ Pension Scheme). 12% of the employee’s salary is deducted for EPF, and the same amount is contributed by the employer. The employer’s contribution goes into the pension fund. Employees become eligible for pension after the age of 58 years, and after 10 years of service. The minimum pension amount is ₹1,000.

2. Nomination Option

EPFO also provides the nomination facility. Employees can nominate family members such as parents, children, or spouse to receive their Employees’ Provident Fund money. In the unfortunate event of the employee’s death, the nominee will receive the Employees’ Provident Fund balance.

3. Option to Invest in VPF

In addition to Employees’ Provident Fund, employees also have the option to invest in VPF (Voluntary Provident Fund). This allows employees to voluntarily contribute extra amounts from their basic salary to the provident fund, helping them save more for the future.

4. Rule for Transferring Funds

When employees change jobs, their Employees’ Provident Fund money can be transferred to the new employer. The money cannot be withdrawn until two months after leaving the previous job. This ensures that employees can continue contributing to their EPF account even when they move to a new job.

5. Partial Withdrawal Facility

EPF members can also make partial withdrawals from their EPF account in times of need. However, there are strict rules about this, and the full amount cannot be withdrawn. Employees can withdraw funds for specific reasons like their siblings’ marriage, children’s marriage, home construction or repair, medical treatment, and surgeries. After 7 years of having an Employees’ Provident Fund account, you can withdraw 50% of the accumulated amount.

6. Interest on Employees’ Provident Fund Amount

Employees’ Provident Fund money earns interest as long as it stays in the account. This interest is credited annually, and since it is compound interest, it provides substantial growth. Currently, the interest rate on Employees’ Provident Fund is 8.15% per annum, but no interest is provided on the pension portion.

7. Life Insurance Benefit

EPFO account holders also receive a life insurance benefit. Even if the company does not provide life insurance, employees can avail of the EDLI (Employees’ Deposit Linked Insurance) scheme, which offers life insurance coverage. This helps provide financial security for the employee’s family in case of unforeseen events.

Conclusion

The benefits provided through Employees’ Provident Fund accounts not only secure the employee’s financial future but also offer security to their family members. These facilities allow employees to plan for a stable future with peace of mind. If your EPF is being deducted every month, make sure to take full advantage of these benefits and secure your financial future.

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