Provident Funds – A Collective Fund for Individual Stability

Provident Funds are specialized funds which are deemed as compulsory accounts that need to be maintained by individuals as a pre-requisite for their retired life. The main characteristic that defines Provident Funds is that are opened in the name of the account holder, but maintained and subject to change, according to the whims of governmental or special regulatory bodies.

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If you know how to manage your PF well, you will be able to reap benefits that few other financial instruments can offer, especially when it comes to financial independence after retirement.

 

What Are the Interest Rates Associated with PFs?

 

These interest rates are subject to change on a yearly basis, as decided by the Board of Trustees, depending on factors stemming from governmental regulations and market trends. With these Provident Funds, you don’t have to pay any taxes, even when you withdraw from the account after five years or more.

What Are the Different Types of PFs?


There are mainly three different types of PFs, which exist amongst the various financial instruments that are a part of this realm of services. These include the following:

  • The General Provident Fund is a type of PF which is maintained by governmental bodies, including local authorities, the Railways and other such bodies. Thus, these types of PFs are mainly defined by the government bodies.
  • The Recognized Provident Fund is the one which applies to all privately-owned organizations that contain more than 20 employees. Moreover, holding a rightful claim to the PF associated with your organization, you will be given a UAN or Universal Account Number. This enables you to transfer your PF funds from one employer to another whenever you move from one occupation to another.
  • The Public Provident Fund is defined by the voluntary nature of investment on the part of the employee. The PPF is also associated with a minimum deposit of INR 50 and a maximum amount of INR 1.5 lakhs. This PF also comes with a pre-determined maturity period of 15 years, only after which any form of withdrawal can be done from the account.

What Are the Various Ways in Which You Can Check Your PF Balance?


Some of the various ways in which you can check your PF balance include the following:


  • Download the UMANG app
  • Access the EPFO website
  • Send an SMS to 7738299899 with the words EPFOHO UAN ENG
  • Give a missed call on 011-22901406
Type of PF Nature of PF Nature of Deposit
General PF Applicable to government bodies Compulsory
Recognized PF Applicable for employees of private organizations Compulsory
Public PF Applicable to everyone who is a part of the general public Voluntary

Withdrawal, Transfer and Claiming of PF

When it comes to withdrawal of your PF funds, you can either choose to submit a physical application or an online application. The best way to do it is to hop onto the EPFO website and use any of the following information to initiate a transfer or a withdrawal process:

 
  • UAN
  • Digital Signature
  • Aadhar Card and Personal Details
 

Each of these can be used in one or several different processes involved in terms of all three procedural aspects. For the purpose of PF transfer, the form that needs to be filled up is Form 13. On the other hand, the forms associated with withdrawal or claims include Form 31 (Part Withdrawal of PF funds), Form 10C (Pension Withdrawal) and Form 19 (Final PF Settlement).

 

Characteristic PF Bajaj Finance FD
Tax exemption Yes No
Maturity date Minimum 15 years for PPF. For RPF/GPF, maturity date is dependent on the employment tenure of the account holder 12 to 60 months
Flexibility of tenure Yes, but will be taxable if done before 5 years Yes
Interest Rates Fluctuate on a yearly basis as per the decisions of the PFO Up to 8.35%
Minimum Initial Deposit INR 500 INR 25000

How Can You Invest Your PF Money?

 

When you withdraw your Provident Fund money, you get a surplus amount of funds that you can use as your retirement funds. You can always grow your retirement funds by investing your PF money in safe investment instruments.

 

To make your PF funds grow over time, you can consider investing your money in Fixed Deposit, which help you multiply your earnings and gain from high returns. You can consider investing in Bajaj Finance Fixed Deposit, where you get to choose your tenor and benefit from periodic interest payouts.

 

Still Confused? Contact Bajaj Finance Customer Care to clear all your doubts or check online procedure to open FD

Provident Funds FAQs

How can I check my PF balance?

You can check your PF balance in a number of ways, as mentioned below-
 

  • EPFO portal: You can check your PF balance from your EPF e-passbook available on EPFO portal. You can login to the portal with your UAN.
  • UMANG App: You can also check your PF balance using the UMANG (Unified Mobile APP for New Governance) app. You can receive a link to download the app by giving a missed call to 9718397183. You can also download it from UMANG website or the app stores.
  • Missed call service: Members registered on the UAN portal can give a missed call to 011-22901406 from their registered mobile number. If your UAN is linked with your bank account number, PAN number or Aadhaar number, you will receive an SMS with the details of your last EPF contribution and PF Balance.
  • SMS service of EPFO: Members with activated UAN can also send an SMS with the text EPFOHO UAN ENG (ENG: your preferred language) to 7738299899 from their registered mobile number. This facility is available in 10 regional languages.

How can I get my PF UAN number?

You can get your UAN from your employer. Most companies print UAN number on the payslips. However, if your employer has not yet shared your UAN number with you, you can find it by following these steps:

  • Go to the EPFO’s Unified Member Portal and select ‘Know Your UAN’ status option.
  • You will be given three options to retrieve your UAN. You can find UAN with your PF member ID, Aadhaar number, or PAN number. Select any one of these three options.
  • You will be now redirected to another page wherein you have to enter your personal details such as name, mobile number, date of birth, email id, etc.
  • Once you submit these details, you will receive an authorization pin on your registered mobile number.
  • Upon entering this pin, your UAN will be sent to your registered mobile number and email id.

Who is eligible for provident fund?

All employees and workers earning less than Rs. 15,000 per month are eligible to receive the provident fund. Employees earning more than this are not eligible, but it is up to the discretion of the employer. All business entities with more than 20 employees are mandated to be members of the EPFO.

What is the benefit of provident fund?

Provident Fund is a superannuation fund for all employees in India. All companies under organised or unorganised sectors with more than 20 employees are mandated to be registered under the administrative entity - Employees' Provident Fund Organisation (EPFO). Both the employee and the employer are required to contribute to this fund until the employee is working with the company. Here’s how you can benefit with Provident Fund:

  • Build a corpus – The regular deduction of EPF contribution goes into your PF amount, which enables you to build a corpus over time.
  • Greater returns – The Government of India through the EPFO pays interest on the accumulated EPF corpus based on the prevailing interest rates in the economy. The interest rate is subject to review and revision each quarter under the Small Savings Act. According to experts, your EPF account continues to earn interest even if it has been lying dormant for more than 3 years.
  • Tax benefits – The employee’s contribution towards an EPF account is eligible for tax exemption under Section 80C, which also makes your earned interest exempt from tax.
  • Insurance benefits – With EPF, you can reap the benefits of Employees Deposit Linked Insurance (EDLI) Scheme, which is an insurance cover provided by the EPFO. Under this scheme, the registered nominee can receive a lumpsum amount in the event of the death of the person insured, during the period of service.
  • Premature withdrawal – The EPFO enables you to make partial withdrawals after 5-10 years of service, for meeting urgent requirements.
Thus, the EPF makes for an effective saving option, which enables you to save more and grow your retirement savings.

How can I withdraw my maximum PF amount?

The Provident Fund amount accumulates during your working life, thereby enabling you to ensure a comfortable retirement. Here’s how you can get the maximum PF amount:

  • PF will keep accumulating over time, if you choose not to withdraw it throughout your working life. This way, you can be assured of maximum PF amount, which can be used during your retirement.
  • You can withdraw the maximum amount of 90% of the total corpus, if you choose to withdraw the corpus 1 year before your retirement.
  • The event of loss of job has also been considered in the latest EPF withdrawal rules. According to these rules, 75% of the accumulated EPF corpus can be withdrawn 1 month after leaving the job. The remaining 25% can be withdrawn after 2 months of unemployment.
  • There are other options for partial withdrawal after a minimum of five to seven years of service. Such withdrawals can be on account of medical emergencies, house renovation, wedding, and home loan repayment. Each of them has a set of rules to be followed.
However, withdrawal before five years of service will attract tax as per your income tax bracket.