You must be well familiar with the term EPF popularly called “Employee Provident Fund”. Employees Provident Fund Organization (EPFO), manages the employee provident fund. Out of your salary, an amount of 12% is compulsorily deducted. This amount is contributed to an account in your name, called the employee provident fund. Your employer makes an equal contribution (contributes the same amount as you have contributed), to this account. This account is maintained by the EPFO.
EPF is very important as it helps you save for retirement. A number of our citizens have become crorepathi’s, just by not touching the money in their EPF account, till retirement. Want to know more about investment planning? Just leave a missed call on IndianMoney.com financial education helpline 02261816111 or just post a request on IndianMoney.com website. IndianMoney.com offers Free, Unbiased and on-call financial advice on Insurance, Mutual Funds, Real Estate, Loans, Bank Accounts and Capital markets.
EPFO which manages your money and that of more than 4 Crore subscribers, has called for a meeting on March 30th. In this meeting, EPFO will consider investing 15% of its investable income in the stock market, to give better returns to its subscribers during the next fiscal. EPFO currently invests 5% of its investable income in the stock market.
You and other subscribers get 8.65% interest a year on your investment in the EPF. EPFO hopes to give you and other subscribers a higher return than 8.65% by investing money in stocks.
2. EPF Withdrawals to cover down payments on home loans
The Government is keen to give you and other citizens your own home. Soon, you and other citizens will be able to use up to 90% of your EPF money, for making down payments while buying your own house. Plans are in motion where soon you will be able to withdraw EPF money, for paying home loan EMI’s. There is a clause you need to remember. At least 10 EPF subscribers need to form a group and buy houses/apartments from a builder or get their homes constructed. You and other EPF subscribers can join together and make a deal with the builder, to buy your affordable home.
If you are a subscriber to the EPFO and a member of a housing society which has at least 10 citizen’s who subscribe to the EPF, you can withdraw up to 90% of your EPF fund to buy or construct a house, flat or apartment.
3. The EPFO invests your money only through exchange traded funds
EPFO invests your money in stocks, only through exchange traded funds (ETF’s). An investment through ETF’s is regarded as quite safe. An exchange traded fund is a mutual fund scheme that tracks an index like BSE Sensex and CNX Nifty. ETF’s can be traded on the stock exchange during market hours, just like stocks. EPFO invests your money in SBI Nifty ETF and SBI Sensex ETF.
EPFO plans to invest around INR 2,800 Crores in the CPSE-ETF (Central Public Sector Enterprises exchange-traded fund), to help the Government’s divestment plans.
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4. The EPFO goes digital
The EPFO says “No” to 1 Rupee revenue stamps. EPFO has asked its field officers to make sure, no revenue stamps are affixed on EPF claim forms, if payment is made through National Electronic Fund Transfer (NEFT).
Some PF exempted establishments still demand that you affix a rupee one revenue stamp on your claim form. EPFO wants to put an end to this.
5. EPFO introduces a single-page composite claim form
Retirement fund body EPFO, wants you to get your EPF claim processed really quickly. You can submit your claim form directly with the EPFO. The new composite claim form (a single page form) introduced by the EPFO, does not require employer attestation.
All you need to do is seed your universal account number (UAN) with your bank account and Aadhaar number. You then submit your claim directly with the EPFO, without the need of an attestation by your employer.
The EPF is not an age old Government retirement plan. It’s much more. It invests your money in stocks. Its going digital. EPF has also made many Indian’s crorepathi’s. Be Wise, Get Rich.
Mr. C S Sudheer is the founder and CEO of IndianMoney.com – India’s largest Financial Education Company. He started his career with ICICI Prudential Life Insurance and later on worked with Howden India. After his brief stint in Howden India, he moved on and incorporated Suvision Holdings Pvt Ltd which is the sole promoter of IndianMoney.com. He aims to build a nation that is financially literate with investment savvy citizens.
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