The Employees’ Provident Fund Organization has reduced the interest rate on EPF deposits to 8.1 percent for 2021-22. Even after this, the interest received on investment in the PF account is higher than other savings schemes. Account-holders get many facilities on contribution to PF account. Kalicharan report giving complete information
Investment advisor Balwant Jain says that the government may have shocked the subscribers (account holders) before Holi by reducing the interest rate on PF deposits, but it is still beneficial in many ways.
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Interest on free insurance closed accounts up to 7 lakhs
The special thing is that the subscribers get free insurance up to Rs 7 lakh under the Employees Deposit Linked Insurance (EDLI) scheme as soon as the PF account is opened. The purpose of this scheme is to provide financial security to the family member after the death of the PF account holder. Earlier this sum insured was Rs 6 lakh.
Apart from this, PF account holders also get interested in closed accounts. You will continue to earn interest even if your PF account is inactive for more than three years. This change has been made by EPFO ​​in 2016. Prior to this, interest is not available if the PF account is inactive for three years.
pension after retirement
A PF account holder becomes entitled to a pension after the age of 58 years. For this, it is necessary to contribute every month to the PF account for at least 15 years. Under EPFO ​​rules, 12% of DA along with the basic salary of the employee goes to the PF account. The company also contributes the same. Of this, 3.67 percent goes to the PF account of the employee, while 8.33 percent goes to the pension scheme.
Easily get all types of loans
In case of emergency, the account holder can take a loan against the amount deposited in his PF account. On this, he will have to pay one percent more interest than the interest earned on the PF deposit. This loan is for three years.
You can withdraw up to 90% of the amount deposited in your PF account for home loan repayment. It can also be used to buy land.
You can withdraw money in between: You can withdraw money from your PF account if necessary. No tax is levied on withdrawal from the PF account if the employee has served in any company for five years. If you work for less than this, you have to pay tax along with 10 percent TDS on PF withdrawal.
Helpful in saving tax
You can also save tax on investment in PF. You can get tax exemption under section 80C of the Income Tax Act on contributions up to Rs 1.50 lakh annually to your PF account in the old tax slab. This facility is not available in the new slab.
Better investment option even after deduction
Investing in a PF account is a better option despite the interest rate cut. The interest available on this is still higher than other schemes like Sukanya Samriddhi Yojana, Kisan Vikas Patra, NSC, Fixed Deposit, etc. The revised rate is still one percent higher than the interest rate of 7.1 percent on PPF.
