Everything you need to know about how your monthly contributions to EPF help you through the ups and downs of life
If you are a salaried individual working for a company covered under the PF Act, you most certainly contribute a part of your monthly salary towards the Employees’ Provident Fund (EPF). Both you and your employer contribute 12% of your monthly basic salary plus dearness allowance towards your EPF account.
To be precise, your EPF balance is built with matching contributions from your employer and you each month. You contribute 12% of your basic salary and dearness allowance every month. Your employer also contributes an equivalent amount — 8.33% towards EPS and 3.67% towards EPF.
However, if you have to recall how much balance you have in your PF account or whether your employer regularly contributes their share to your PF account, you most probably don’t have an idea about the numbers. Then, why not track your EPF regularly? Got to hunt down your UAN and recall your password, we know how much hassle that is.
To make it easy for you, we have added a feature within the NiyoX app that lets you check your EPF balance, the interest earned, transaction history, etc. with just your mobile number and the OTP received on it. Isn’t that super simple?!
2 simple steps to track your EPF on the NiyoX app:
- Tap on Menu > Utilities > Track your EPF balance > Track
- Enter your Mobile Number and OTP received on it
Or click here.
That’s it! You’ll have your EPF balance, the interest earned, and the transaction history at your disposal.
Just make sure the mobile number linked to your PF account is the same as your NiyoX registered mobile number.
Benefits of EPF
EPF as many know it as a retirement-oriented scheme is also a good low-risk investment instrument with returns much higher than bank deposits. What you might not know is EPF comes with several benefits including,
1. Loan or advance against EPF
An EPF loan actually is an early withdrawal from your account. The advance toward your EPF comes interest-free and it doesn’t have to be paid back either.
However, whether you can withdraw partial or the full amount comes with certain conditions linked with the purpose and the number of years you have worked and contributed to EPF. Here is a quick checklist:
|Purpose||Withdrawal Limit||Years worked||Details|
Lower of the below:
1. Six times the monthly basic salary
|No criteria||For medical treatment of self, spouse, children, or parents|
|Wedding||Up to 50% of employee’s share of contribution to EPF||7 years||For the marriage of self, children, and siblings|
|Education||Up to 50% of employee’s share of contribution to EPF||7 years||For self or child’s education (post 10th grade)|
|Land/house purchase or house construction|
For land – Up to 24 times of monthly basic salary + DA.
For house – Up to 36 times of monthly basic salary + DA
The above limits are restricted to the total cost.
1. The land/house should be in the employee’s name or jointly owned with their spouse.
2. It can be withdrawn just once for this purpose during the entire service.
3. The construction should begin within 6 months and must be completed within 12 months from the last withdrawn instalment.
|Home loan repayment|
Least of the below:
1. Up to 36 times of monthly basic salary + DA
2. Total EPF
3. Total outstanding principal and interest on housing loan
1. The property should be registered in the name of the employee, spouse, or jointly with the spouse.
2. Withdrawal permitted subject to furnishing of requisite documents as stated by the EPFO relating to the housing loan availed.
3. The total amount in the member’s PF account (or together with the spouse), including the interest, should be more than ₹20,000.
Least of the below:
1. Up to 12 times the monthly wages + DA
2. Employee’s contribution with interest
3. Total cost
1. The house should be registered in the name of the employee, spouse, or jointly with the spouse
2. The facility can be availed twice:
a. After 5 years of the completion of the house
b. After 10 years of the completion of the house
|Approaching retirement||Up to 90% of EPF balance with interest||Once the employee reaches 54 years and withdrawal should be before one year of retirement/superannuation (retirement fund for employees by the company)|
You can withdraw your full EPF balance under circumstances such as:
- On retirement
- If you’re unemployed for more than two months
- While switching jobs if the gap is more than two months
2. Free Insurance Coverage
Employees Deposit Linked Insurance Scheme (EDLI) is an insurance cover provided by the EPFO (Employees Provident Fund Organisation) for private sector salaried employees. As a contributing member of the EPF, you are automatically eligible for this insurance coverage.
The registered nominee gets a lump-sum amount in the event of the death of the insured member, during the period of their service. EDLI scheme works in combination with EPF and EPS.
Here’s how it works:
- EDLI applies to all employees with a basic salary under Rs. 15,000/- per month with a minimum benefit of ₹2.5 lakhs. If the basic salary goes above Rs. 15,000 per month, the maximum benefit is capped at ₹7 lakhs (w.e.f 28.04.2021).
- There is no need for the employees to contribute to EDLI. Their contribution is required only for EPF.
- There is a bonus of ₹2.5 lakhs available under the EDLI (w.e.f 28.04.2021)
- Any employee who has an EPF account automatically becomes eligible for the EDLI scheme.
- There are no exceptions to the insurance coverage provided by EDLI. It protects the insured person round the clock, all around the world.
3. Pension at retirement
EPFO introduced the Employees’ Pension Scheme (EPS) in 1995 to make it possible for salaried employees to get a pension after their retirement at the age of 58 years.
As discussed earlier, you and your employer contribute 12% each of your monthly basic salary plus DA towards your EPF. While your entire share is contributed towards EPF, 8.33% of the employer’s share goes towards the EPS and 3.67% goes towards EPF every month.
One must have completed a total of 10 years of service with or without gaps in their employment and be over the age of 50 to receive an early pension and 58 years for a regular pension. If you postpone the pension for 2 years until you turn 60 years, you will be eligible to receive the pension at an additional interest of 4% per year.
4. Builds Savings Hassle-free
Since the EPF gets deducted directly from your salary every month, you don’t have to make an extra effort to save money. Since EPF balance is tax-free and earns more interest than any other savings options in the market, it grows to a sizeable amount at the end of your tenure. It’s a good low-risk investment option working towards your retirement.
To make it easy for salaried individuals to manage their finances, NiyoX has introduced a lifetime zero balance salary account. NiyoX is a digital 2-in-1 savings account + wealth management platform and comes with irresistible features including,
- Lifetime zero balance savings account
- Industry-best 7% interest* p.a. on savings
- Free VISA Platinum Debit Card
- Zero forex markup* on international spends
- Zero commission direct mutual funds
- Rewards and cashback
- Import external investment portfolio
Not to mention, you can manage your savings, track your EPF, and manage your investments all in one place. So, what are you waiting for? Get the best salary account and earn Salary Rewards* with each salary credit for a year.