How to Invest your EPF Savings?

Explore 5 smart ways to invest your EPF money for better returns. Learn how to use your EPF savings effectively to grow wealth and secure your financial future
OPEN FD
4 mins
07 February 2025

Experiencing an influx of emotions as you near retirement is inevitable. With a lifetime’s worth of savings in your EPF account, you may be looking forward to a comfortable retirement. However, with limited savings in your account, funding your expenses after retirement can be tricky.

Investing smartly can help you generate wealth and help you earn income from your existing pool of savings. The best way to start is to invest the lump sum EPF savings amount in different high-yielding investment options.

Here are some meaningful ways to use your EPF money

Invest in fixed deposits

Fixed deposits are the best investment avenues for individuals looking to multiply their EPF money. Here’s a look at some of the best advantages of investing in fixed deposits.

  • Assured returns on your principal amount
  • Get high-interest rates with stability
  • Benefit from flexible tenor
  • You can choose periodic gains

These investments are not affected by market forces, so your principal amount remains intact, and so there are no risks. Bajaj Finance offer one of the highest interest rate of up to 7.30% p.a. on their fixed deposit.

Fixed deposit variants

Highest Credit Ratings | Trusted with over 1.4 million Deposits | Assured Returns on FD
Recommended

Fixed Deposit - 60 Months

INTEREST RATES UP TO
7.30% p.a.
Invest Online

Fixed Deposit - Senior Citizen

INTEREST RATES UP TO
7.30% p.a.
Invest Online

Fixed Deposit - Age below 60

INTEREST RATES UP TO
6.95% p.a.
Open FD

Fixed Deposit - Minor

INTEREST RATES UP TO
6.95% p.a.
Open FD

Fixed Deposit - HUF

INTEREST RATES UP TO
6.95% p.a.
Open FD

Fixed Deposit - Sole Proprietor

INTEREST RATES UP TO
6.95% p.a.
Open FD

Invest in shares and mutual funds

Investing in market-linked securities like shares and mutual funds can help you gain from high-interest rates over a short period of time. Mutual funds offer you a rate of return up to 20% based on your portfolio.

These investment options are also highly liquid and let you exit your investment any time during the tenor. It is important to note that they operate on the market and fluctuate constantly and require close monitoring.

Since these are high-risk options, be sure to balance the risk with low-risk investments and ensure that you invest only a tiny part of your portfolio in shares and mutual funds. When investing to grow your savings, making a choice between mutual funds and fixed deposits can be difficult.

While mutual funds can accelerate the growth of your returns, fixed deposits ensure higher safety and stability. If you’re a risk-averse investor, fixed deposits are a better alternative to the risky returns from mutual funds.

Read also: How to Register Mobile Number in EPF

Explore Life Insurance policies

There are many life insurance policies that allow savings and investment opportunities to policyholders along with a life cover. Such life insurance policies are gaining popularity over the time with growing awareness. Explore life insurance plans with coverages up to Rs. 1 crore offered by leading insurance providers through Bajaj Finance Insurance Mall. This platform is a one-stop solution to all insurance products, allowing you to compare and choose the most suitable insurance product online. Get a life insurance policy of your choice at affordable premiums through Bajaj Finance Insurance Mall and secure your and loved ones’ financial future.

Build a safety net using SCSS

Senior Citizens Savings Scheme (SCSS) is an investment option customised for you post-retirement. It offers you an interest rate of up to 7.4% and involves investing for 5 years. You can further renew your SCSS for 3 more years. You can invest a sum ranging from Rs. 1,000 to 15 lakh. This is a stable investment option that is free from the influence of market forces and is backed by the government. Here, you can either open one or many single accounts or a joint account.

Use it to invest in real estate

This is a great investment option that offers you a high rate of return. Besides, investing in real estate can also be used to hedge against inflation. This form of investment also gives you more flexibility. You can purchase one or more residential or commercial properties and put them on rent. You also have the option of letting your investment in a property grow over time and then selling it when the property prices are high enough. As a thumb rule, ensure that you pick a recent property in an area that has good growth prospects.

Investing your EPF money in a profitable combination of these options can easily help you finance post-retirement life. By choosing the right mix of investment options, you can craft a sound investment portfolio that offers you the stability of income and financial growth for your entire retirement period.

Conclusion

Retirement marks the beginning of a new chapter where financial stability is just as important as peace of mind. The way you utilise your EPF savings can make all the difference in ensuring a secure and stress-free future. While options like mutual funds and real estate may bring higher returns, they also carry risks. On the other hand, fixed deposits and SCSS provide assured safety and stable income. Striking the right balance between growth-oriented and low-risk investments will help you create a diversified portfolio tailored to your needs.

If you prefer safety with steady earnings, Bajaj Finance Fixed Deposit is an ideal choice with competitive interest rates of up to 7.30% p.a., flexible tenors, and the assurance of guaranteed returns. By investing wisely, you can turn your hard-earned EPF corpus into a sustainable source of income and enjoy the retirement lifestyle you’ve envisioned.

Frequently Asked Questions

How much EPF can be invested?

The Voluntary Provident Fund (VPF) enables you to contribute an amount exceeding 12% of your monthly basic salary into the EPF.

What is the rate of return on EPF?

The EPF interest rate undergoes an annual review. For the fiscal year 2023-24, the interest rate on EPF stands at 8.25%.

Is EPF return guaranteed?

Yes, EPF offers a guaranteed return.

Can I use EPF for investment?

No, you cannot directly use the money in your EPF account for investments while you are still employed, as the funds remain locked until retirement or under specific withdrawal conditions. The EPF is primarily a retirement savings tool designed to ensure financial security in your later years. However, once you retire or withdraw your EPF balance (partially under permitted rules or fully after leaving service), you can use the amount for various investments like fixed deposits, mutual funds, senior citizen schemes, or even real estate. This allows you to put your accumulated corpus to work and generate steady income or long-term growth, depending on your risk appetite.

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Disclaimer

As regards deposit taking activity of Bajaj Finance Ltd (BFL), the viewers may refer to the advertisement in the Indian Express (Mumbai Edition) and Loksatta (Pune Edition) furnished in the application form for soliciting public deposits or refer https://www.bajajfinserv.in/fixed-deposit-archives
The company is having a valid Certificate of Registration dated March 5, 1998 issued by the Reserve Bank of India under section 45 IA of the Reserve Bank of India Act, 1934. However, the RBI does not accept any responsibility or guarantee about the present position as to the financial soundness of the company or for the correctness of any of the statements or representations made or opinions expressed by the company and for repayment of deposits/discharge of the liabilities by the company.

For the FD calculator the actual returns may vary slightly if the Fixed Deposit tenure includes a leap year.