PF Interest Rate: For the fiscal year 2024–2025, the EPF interest rate has been set at 8.25%. However, are you aware that when you move jobs, you have to transfer your PF? You might lose money if you don’t do this.
How to Transfer PF Account: This information will be helpful to you if you are a salaried individual and your monthly contributions are deposited into the Employee Provident Fund (EPF). For those who are employed, this is the most dependable retirement savings plan. It offers a favorable interest rate and tax exemption. You must move your old EPF account to your new employer when you change employment. Will you receive interest on the old EPF account, however, if you shift employment and don’t move it to the new employer? Or will you lose out on more profits? Let’s comprehend the entire system:
What occurs if there is no transfer of the EPF account?
Your EPF account does not transfer to the new employer when you change employment. To begin the transfer process, you must visit the EPFO member service portal. Your Universal Account Number (UAN) doesn’t change as long as funds are still deposited into the previous account. However, a lot of people overlook or put off this process. Some people believe that interest will continue to be paid on the old account indefinitely.
On your previous account, do you receive interest?
Yes, but only for three years. According to EPFO regulations, interest is paid for 36 months following the last deposit if the account remains dormant. The account becomes dormant after three years without a new deposit and after you have left your position (for example, by retiring or leaving your work). Interest then ceases. For instance, you would not have received interest on your previous account beyond 2023 if you had moved jobs in 2020 and failed to transfer it.
In the fiscal year 2024–2025, the EPF interest rate is 8.25%. However, you will not receive interest after three years if you do not transfer the old account, which means you will miss out on the chance for larger profits. The funds become inactive if the old account is not transferred. What if you changed jobs in 2020 and your previous account didn’t earn interest until 2023? Your previous account’s funds are stuck while your new employer deposits money into the new account. You no longer benefit from compound interest as a result. Additionally, there can be issues with money withdrawal if the old account’s KYC, bank account, or Aadhaar are not updated.
What ought to be done?
After moving employers, transfer your EPF account as soon as you can. Online, this process is really simple. By using your UAN and Aadhaar to enter the EPFO portal, you can apply for a transfer. All of your funds will be deposited into a single account, and interest will continue to accrue. You can increase your retirement savings and receive decent returns with timely transfers.
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