EPF Benefits – After Death, Pension, Interest, Withdrawal
Benefits of Employee Provident Fund
EPF i.e. Employee provident fund is a small part of your salary. 12% of your basic salary which gets deposited in your provident fund account every month. This thing is known by most of us. But there are many other benefits of EPF which not only you should know but also take benefit of as mentioned below:
- After Death Benefits: You can nominate anyone for your Employee provident fund account. Although this is the most basic feature of EPF, but not many people know that you can nominate any family member. This family member can then claim this account in case of death of the account holder.
- You can receive pension on EPF account: Small portion of EPF money gets deposited in your pension account. But there are certain terms and conditions through which you can become rightful owner of the pension after certain period of time. For getting the pension amount you need to be aged 58 and your tenure should be minimum 10 years. If you have worked in more than one company then your PF should have been transferred. If you have claimed for the pension amount before 10 years then you won’t be eligible to receive the pension. To know your current EPF balance you can use option of EPF e-passbook.
- No interest on pension part: You don’t get any interest on the pension part of EPF which gets deducted from your salary every month. Instead you get interest only on the EPF excluding the pension part. Most of the people think that interest is earned on the full EPF amount which is incorrect.
- There is a possibility that you won’t get 100% of EPF amount: Imagine that your total EPF amount is 4,00,000 out of which 3,00,000 goes into EPF and the remaining 1,00,000 goes into pension account. Now if you change your job in the sixth year, so do you think you’ll get INR 4, 00, 000? Answer is NO. This is due to the fact that the rules and regulations of pension account is different although you’ll get the 100% of your EPF amount.
- It’s illegal to withdraw EPF amount after job change: Most of the people think that after changing the job you can withdraw the EPF amount. But according the EPF rule, this is illegal. Withdrawing EPF amount is applicable only when you are jobless for over two months. Best option is to transfer your EPF amount to the new company instead of withdrawing it.
- EPF includes life insurance: Most of the people are unaware of small life insurance covered under EPF. This helps when the employer doesn’t provide group health insurance policy. This is known as employee deposit liquid insurance. Also read about group and individual health insurance policy.
When can you withdraw EPF?
You can withdraw EPF before the tenure by providing a strong and valid reason. For e.g. you can withdraw small amount for kids’ education or their marriage, medical treatment for your family member, paying the home loan, maintenance of house.
Get to know about voluntary provident fund benefits and limit
Hi, I am Nikesh Mehta, owner and writer of this site. I’m an analytics professional and also love writing on finance and related industry. I’ve done online course in Financial Markets and Investment Strategy from Indian School of Business. I can be reached at nikeshmehta@allonmoney.com.
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Dharamraj
Sir.,
my father death 59 years in this time leave epf report to benefit from pension nominee 2.5 year service to epf
AllOnMoney.Com
Dear Dharamraj, I could not understand your question clearly. Can you send it in detail. Thank you.
Anuradha
What is the calculation of PF amount in event of Death of Employees
manish
i want to know if any employee will not withdrawl his money from pf account after leaving job.then whats the duration of interest will be given by government.
Joe
What happens to the principal amount after the death of a pensioner.
Is the principal amount given to his family member whom he has nominated.
In case the nominee is a working major person and is not eligible for pension does he get the principal amount?
Ravi
Dear All,
My question is if a person is working more than 7 years in a same company ,and he unable to go company due tohis health problem for 5 months finally he died , whats the pf benefits his family will get pls inform us.