Now interest will rain on inactive PF account also, EPFO’s big gift for those leaving their jobs.

News India Live, Digital Desk: Usually, when we work in a private company, a part of our salary is deposited in the EPF account. This is our retirement savings. But the most confusion occurs when a person leaves the job or loses his job due to some reason. In such a situation, the first question that comes to mind is “Will my PF account become useless now?”

illusion and reality
Earlier there was a fear that if no new money was deposited in the PF account for 3 years (36 months), then that account would be considered ‘inactive’ and interest on it would stop. But now the rules have changed. According to the new rules of EPFO, even if you have left the job and have not withdrawn your money, you will continue to earn interest on your deposited money.

That means whether you are working somewhere or not, the compound interest on your PF fund will keep increasing annually. This is a big win for those who want to leave their job and start their own startup or take some time off for studies.

But there is a ‘catch’ i.e. a small condition here…
You will continue to get interest, but this facility is not forever. EPFO has clarified that the interest will be available till the employee reaches the age of 58 years (retirement age). Once you turn 58, the account is considered completely ‘inoperative’ and interest does not accrue thereafter.

What is the benefit of not withdrawing money?
If seen, the interest rate of EPF (which is currently around 8.25%) is much better than any normal savings bank account. In such a situation, if you are not in dire need of money, then it is not wise to withdraw the entire amount immediately even after leaving the job. If that money remains in the account, it is safe and will also keep growing.

Just keep one thing in mind, if you withdraw money before 5 years of continuous service, it may be hit by tax. But on changing jobs, the smartest move is to transfer the old PF to the new company through UAN.

Well, it is clear from this decision of the government that now the break from work will not affect the growth of your old savings. Your hard-earned money will now continue to shape your future even without working.