Left the job? Know what will happen to the money kept in your PF account now, will it sink somewhere?

After changing or leaving the job, we often wonder what will happen to our EPF Fund (PF) account? Is the money kept in it safe? Will interest continue to be earned on it? If you also have such questions in your mind, then this information is very important for you, because a small mistake can lead to a tax notice or your retirement fund can become weak.

What happens when money stops being credited to the PF account?

The first and best news is that your money remains completely safe. But some rules change:

1. Interest continues to be received for 3 years: Even after leaving the job, interest continues to be received on the amount deposited in your PF account.
2. Account becomes ‘inactive’ after 3 years: If no money is deposited in your PF account for 36 months i.e. 3 years, then your account is considered ‘inactive’. The most important thing is that once the account becomes inactive, it stops earning new interest.

However, your money still remains safe with EPFO ​​and you can withdraw it later.

Should I withdraw the money or not? This is where most people make mistakes

If you are unemployed for more than two months, you can withdraw your entire PF money. But before taking this decision, be sure to know this tax rule:

Tax trap: If you have not completed 5 consecutive years in the job, then you will have to pay tax on the PF money withdrawn. Your company’s contribution and the entire interest earned on it will be added to your income for that year and you will have to pay tax as per your tax slab.

At the same time, if you do not withdraw the money, the interest earned on it remains tax-free.

Then what to do? the smartest thing to do

The most sensible thing to do is not to withdraw the money, but get it transferred to the PF account of your new company.

This work can be done in a jiffy with your UAN (Universal Account Number). Its advantages are:

• Continuity of service: Your total years of service get added, thereby easily fulfilling the 5 year tax requirement.
• Savings keep growing: Your money keeps earning interest continuously, which makes your retirement fund grow faster.
• Pension Benefit: By adding years of your service, you also get the full benefit of pension (EPS).

An important tip: keep your information updated

Like the phone number written in an old diary, if your KYC (PAN, Aadhaar) and bank details are not updated in your PF account, withdrawing or transferring money later can become a headache. Therefore, check your information by visiting your UAN portal from time to time and keep it updated.

Remember: Your PF is not just a savings, but a support for your old age. Don’t make the mistake of breaking it for small needs. Transfer it and let it rise.