The provident fund account accumulates the contributions made by both the employee and the employer. Its purpose is to provide the employee with a lump sum at the time of retirement from service. The Employees’ Provident Fund Organization (EPFO) allows employees make a partial withdrawal from their PF accounts in return for no payments and the money can be used as a personal loan.
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The EPFO has reduced the rates of interest on deposits to 8.55% for the financial year 2017-18 following a decline in the rates of interest. The rate of interest for the year 2016 for the Employees’ Provident Fund was 8.65%, which also shows a decline from the previous interest rate of 8.8% in the year 2015.
There are a certain set of rules implemented by the EPFO to avoid premature withdrawal of the provident fund. The EPF Advance rules are implemented to avoid frequent withdrawals by the employee from PF accounts and force them to save money for retirement. Listed below are the EPF Advance rules:
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There are certain eligibility criteria for availing an EPF Loan. The EPF advances can be availed by individuals in case of medical emergency, marriage, purchase of home or plot, unemployment or home loan repayment. However there should be a valid reason behind partially withdrawing money from the EPF account and applying for the EPF Loan. Listed below are some of the eligibility criteria for availing funds from the PF account:
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To enable people calculate their PF balance and interest, the EPF loan calculator is available online. You need to enter a few details like your current age, the age you wish to retire, your monthly salary, the total monthly EPF contribution and the interest rate earned on the deposits.
The Employees’ Provident Fund interest is calculated on the basis of the contribution made by the employee along with the employer. After you enter the above details and make a submission, the EPF calculator shows how much money you will be able to save at the time of retirement.
The employees who have sent a claim in any of the branches of the Employees’ Provident Fund Organization appealing for the EPF loan, withdrawal or advance amount, can check the status of the EPF loan. To raise an enquiry about the status of EPF loan, the applicant must have their PF account number. By providing the PF number one can easily find out the status online.
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