The Employees' Provident Fund Organisation (EPFO) oversees the Employees' Provident Fund (EPF) scheme in India - a retirement savings plan aimed at salaried individuals. Under this scheme, a portion of the employee's monthly salary is contributed along with the employer's contribution towards building a retirement corpus.
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EPF serves as a long-term investment that can also be withdrawn to meet specific needs like purchasing a home, funding children's marriage, etc. Contributions accumulate interest over time, establishing the EPF as a potential tool for wealth creation. As an EPF member, regularly checking your account balance is crucial to ensure timely credits of contributions and accrued interest.
This comprehensive guide contains all the necessary details regarding EPF balance checks. It will help you keep track of your retirement savings and enable efficient financial planning.
What is the EPF scheme?
The Employees' Provident Fund (EPF) is a retirement savings program in India that provides financial security for employees in the organized sector. Managed by the Employees' Provident Fund Organisation (EPFO), it falls under the Ministry of Labour and Employment.
Under the scheme, employees and employers make equal monthly contributions of 12% of the employee's basic salary and dearness allowance. The EPFO invests these contributions, and they earn an annual interest, which was 8.1% for 2022-23. During your work, the money you save gradually grows, and when you retire or leave your job, you receive the total amount have saved.
The EPF aims to ensure employees have a retirement nest through forced long-term savings. By making regular contributions over one's career, employees steadily build a retirement fund to provide financial stability after leaving the workforce. The matching employer contribution makes saving for retirement easier on employees' incomes.
Salient Features of the EPF Scheme
Here are some key features of the EPF scheme that employees should know:
All establishments with over 20 employees must compulsorily register with the EPFO and enroll their eligible employees under the EPF and EPS schemes.
An employee can only have a single EPF account at any given time. Multiple accounts will lead to issues in closure, transfer, and withdrawal.
The statutory monthly contribution is 12% of the employee's basic pay and DA by both employee and employer. This adds up to 24% of the monthly basic pay and DA.
Employees with over 1 year of continuous service can withdraw partially from their EPF balance for specific expenses like education, marriage, house purchase, etc.
The EPF scheme is governed by the EPF Act 1952, EPS Act 1995, and EDLI Act 1976. Together, they regulate provident funds, pensions, and employee insurance benefits.
The interest rate is fixed annually by the EPFO based on the earnings from investing the EPF corpus. For FY 2022-23, it is 8.1%.