PF money migration: How is the money divided?
The PF taken from your salary includes your and your company's contributions. On both sides, 12% of your basic salary will be deposited in your PF account. But the same amount does not go directly to one place but is divided into different schemes.:
-
Your contribution (12%): The full 12% of your contribution is deposited directly into your EPF (Employees' Provident Fund) account. Or you get interest every year on money, which increases your savings.
-
Company Contribution (12%): 12% contributed by the company is divided into three parts:
-
8.33% goes to EPS (Employee Pension Scheme), from which you get pension after retirement.
-
3.67% is deposited in your EPF account, which adds to your savings.
-
Only a small amount would go to EDLI (Employee Insurance Scheme), which would provide financial protection.
-
For example, if your basic salary is Rs 20,000, you and your company pay Rs 2,400 each towards PF. However, only Rs 734 (3.67%) will be transferred to your EPF account, as the remaining amount will go towards pension and insurance schemes. It all sounds a bit complicated, but it will secure your future!
More details: Visit epfindia.gov.in and check detailed information about your PF account.
Where does EPFO invest your money?
Do you actually think that EPFO keeps your money only in the bank? No! EPFO makes safe and profitable investments of your money, so that you get good returns. Where does the money go?
-
Government bonds and securities: These are the safest investments, where there is less risk and stable returns.
-
Corporate Blocks: These are blocks of public and private companies, due to which there is a possibility of getting slightly higher compensation.
-
Exchange Traded Funds (ETF): Over the past few years, EPFO has invested 15% of its corpus in stock market linked ETFs. This increases the chances of getting long term profits.
Pension and commutation benefits
PF is not just limited to savings or includes pension and insurance:
-
Pension (EPS): If you have contributed to the PF scheme for 10 years or more, you can get monthly pension after 58 years. Only pension will provide you financial support after retirement.
-
Insurance (EDLI): Unfortunately, if the employee dies prematurely, the insurance benefit for his family is available under the EDLI scheme. This is provided through the contribution of the insurance company.
If you have worked for less than 10 years and you close your PF account, you can withdraw the EPS amount by filling Form 10C. But after more than 10 years, you would be eligible for pension, hence no amount can be withdrawn from EPS. This plan has been made to take care of your future.
What do you want to do?
It is very easy to check the details of your PF account. Go to EPFO's official website epfindia.gov.in , log in using your UAN (Universal Account Number) and check your account status. If you want to know more about the schemes, then contact the EPFO office nearest to you. Knowing where and how your hard-earned money goes will help you feel confident about your future.
👉 To see amazing offers from 'Smart Deals' for shopping Click here