New Delhi. Those employed in the country get the facility to deposit money in PF (Provident Fund). Contribution to PF is mandatory, which is deducted from people’s salary and deposited. Every month a small amount of money is deposited in your PF account and by the time of retirement a large amount is ready.
This money is maintained by EPFO (Employees Provident Fund Organization). Let us know that interest continues to be paid on this deposit. EPFO invests your deposited money in many places to pay interest. You can withdraw PF money before retirement. But it is advisable to use this money only in times of extreme need. This is a kind of investment on which you get interest. But PF account has 5 major advantages, which no one can ignore.
High interest rate
As mentioned above, you get an interest rate on the money that is deposited in your PF account. But this interest rate is quite high. Presently, there is a much higher interest rate on the PF account than the savings schemes of post office and FD interest rate. It has been announced to pay 8.5 percent interest rate on the PF account for the current financial year. The interest rate is announced by the EPFO after review for every financial year.
The benefit of tax deduction under Section 80 (C) of the Income Tax Act on PF account is given. A major benefit of this scheme is that under the Pension Scheme, 1995 (EPS), you get pension throughout your life.
Can withdraw money
For your information, let us know that you get the facility to withdraw money from the PF account at the time of need. You can withdraw partial amount from PF account at any time of need. The good thing is that the government has given special facility to PF account holders to withdraw money from the account in view of the coronovirus epidemic.
Free insurance of Rs. 6 lakhs
EPF account holders get life insurance cover under the EDLI rules of EPFO. The EPF account holder does not have to pay any premium for this. In this life cover, an employee can earn up to Rs 6 lakh or 20 times of his basic monthly salary (whichever is less). In case of chronic illness, accidental death or even normal death, the provident fund account holder can claim a nominee for life cover.
There is so much money deposited
Explain that both the company and the employee (you) have to deposit 12-12% of your basic salary in the PF account. That is, 12% of your basic salary is deducted and the company collects the same amount and deposits it in the PF account. Not everyone can open a PF account under the rules. Only the registered company employees can open a PF account and they can deposit money in it.