The Indian Organization which came into existence in 1952, for the sole motto of forced savings is one of the largest Provident fund institutions in the world in terms of transaction volume. The Employees’ Provident Fund Organization (EPFO) follows the Employees’ Provident Funds & Miscellaneous Provisions Act, 1952.
All the employees are eligible to avail the PF schemes from the day he/she joins a company which is covered under the EPF act, 1952. The contribution payable by each employee is fixed as 12% of the CTC (Cost to Company). As per the new rules, employees earning a sum of Rs 15000/- are eligible for EPF Scheme which is increased for the older limit of Rs 6,500.
Benefits of Employees’ Provident Fund
As the motto states, EPF was created to increase forced savings which is a boon at the time of old age. For an instance, if an employee starts contributing at the age of 21 and sum of Rs 1,000 a month and the contribution increases by 10% every year. Then, with the benefit of 8% interest every year an employee at the age of retirement i.e. 60 will be the owner of a handsome amount totaling to a whooping Rs 1.32 crore.
Other Benefits includes unemployment after 10 years will still save you with the emergency fund saved in working years. Going with the same instance, the amount saved will be nearly Rs 2.5 Lakhs.
Employee Provident Fund can be utilized for buying the ultimate dream house you have been dreaming for years. It could also be saviors in times of a medical emergency.
The other available benefits of Employee Provident Fund are utilizing it in cases of natural calamities. One can also nominate a family member to avail the funds in case of demise.
However, no matter how the funds could be utilized it is very important to keep it as the last option. Don’t forget it’s a retirement tool.
So yes, Employee Provident Fund might be a forced saving but it is surely a life savior when needed.