Retired But Didn’t Withdraw EPF? Know When Your Savings Stop Earning Interest

Reti eme t
ofte
cha ges
the
way
people
look
at
thei
savi gs.
While
the
focus
du i g
wo ki g
yea s
is
o
buildi g
a
eti eme t
co pus,
the
p io ity
afte
eti eme t
shifts
towa ds
p otecti g
that
mo ey
a d
ge e ati g
a
steady
i come
f om
it.

Fo
ma y
sala ied
employees,
the
Employees’
P ovide t
Fu d
(EPF)
fo ms
a
sig ifica t
pa t
of
that
co pus.
But
the e
is
a
impo ta t
detail
that
eti ees
who
leave
thei
EPF
savi gs
u touched
eed
to
k ow:
the
mo ey
does
ot
co ti ue
ea i g
i te est
i defi itely.

The
Employees’
P ovide t
Fu d
O ga isatio
(EPFO)
has
specific
ules
gove i g
how
lo g
i te est
ca
be
c edited
afte
a
membe
stops
wo ki g.

Reti ed
At
58?
You
EPF
Ca
Co ti ue
Ea i g
Fo
Th ee
Mo e
Yea s

Acco di g
to
the
EPFO’s
FAQ
sectio ,
i te est
ca
co ti ue
to
be
c edited
to
a
EPF
accou t
eve
afte
a
membe
leaves
employme t,
subject
to
the
applicable
age
limits.

Fo
a
pe so
who
eti es
at
58,
i te est
ca
co ti ue
to
be
c edited
fo
a othe
th ee
yea s,
which
mea s
the
accou t
ca
ea
i te est
u til
the
membe
eaches
61.

EPFO
had
also
cla ified
the
ule
th ough
a
post
o
X,
sayi g
that
i te est
would
co ti ue
to
be
c edited
fo
th ee
yea s
afte
eti eme t
at
58.

The
situatio
is
slightly
diffe e t
fo
people
who
stop
wo ki g
late
i
thei
ca ee s.
If
a
membe
stops
wo ki g
o
o
afte
eachi g
55,
EPFO
will
co ti ue
to
c edit
i te est
fo
a
maximum
of
th ee
yea s,
epo ted
Livemi t.
Afte
that
pe iod,
the
accou t
becomes
i ope ative
a d
f esh
i te est
is
o
lo ge
c edited.

The
Mo ey
Does & squo;t
Disappea
Afte
I te est
Stops

A
i ope ative
EPF
accou t
does
ot
mea
that
the
eti eme t
savi gs
a e
lost.

The
bala ce
co ti ues
to
emai
with
EPFO
a d
ca
be
claimed
by
the
accou t
holde
late .
If
the
o igi al
membe
dies,
the
omi ee
ca
also
make
a
claim
o
the
accumulated
amou t.

The
impo ta t
disti ctio
is
that
the
co pus
emai s
safe,
but
it
stops
ge e ati g
additio al
i te est
o ce
the
accou t
becomes
i ope ative.

Fo
eti ees,
this
makes
the
i te est-c editi g
timeli e
a
impo ta t
co side atio
whe
decidi g
whethe
to
leave
thei
EPF
savi gs
u touched
afte
eti eme t.

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Che ai,
Mo e

Why
The
I te est
Rule
Matte s
Fo
A
Reti eme t
Co pus

The
EPF
is
desig ed
as
a
lo g-te m
savi gs
mecha ism,
with
egula
co t ibutio s
made
du i g
employme t.

The
cu e t
EPF
i te est
ate
is
8.25
pe
ce t
pe
a um.
The
ma dato y
employee
a d
employe
co t ibutio s
a e
calculated
at
12
pe
ce t
of
the
statuto y
wage
ceili g
of
Rs
15,000,
which
wo ks
out
to
Rs
1,800
pe
mo th
f om
each
side.

A y
co t ibutio
above
this
level
is
volu ta y.

Ove
a
lo g
wo ki g
ca ee ,
these
egula
co t ibutio s
a d
the
i te est
c edited
by
EPFO
ca
build
a
substa tial
co pus.
That
is
why
the
poi t
at
which
i te est
stops
ca
matte
fo
someo e
elyi g
o
the
EPF
as
pa t
of
thei
post- eti eme t
fi a cial
cushio .

O e
Mo e
Poi t
Reti ees
Should
Check:
Tax
O
Withd awal

The
decisio
to
withd aw
EPF
savi gs
also
has
a
tax
a gle.

EPF
withd awals
a e
exempt
f om
tax
whe
a
employee
has
completed
at
least
five
yea s
of
co ti uous
se vice.
I
such
cases,
o
TDS
is
deducted
o
the
withd awal.

The
five-yea
equi eme t
is
ot
est icted
to
se vice
with
o e
employe .

Whe
a
employee
cha ges
jobs
a d
t a sfe s
the
EPF
bala ce
to
the
ew
employe
athe
tha
withd awi g
it,
the
ea lie
pe iod
of
se vice
is
also
i cluded
whe
calculati g
co ti uous
se vice.

The e
a e
ce tai
othe
situatio s
whe e
a
withd awal
befo e
five
yea s
may
also
emai
tax-exempt,
i cludi g
te mi atio
because
of
ill
health,
closu e
of
the
employe ‘s
busi ess
o
othe
ge ui e
ci cumsta ces
beyo d
the
employee’s
co t ol.

What
Ca
Reti ees
Do
With
Thei
Savi gs?

Fo
people
app oachi g
o
e te i g
eti eme t,
the
questio
is
ot
simply
whethe
to
withd aw
the
EPF
co pus.
It
is
also
about
whe e
the
mo ey
should
be
kept
to
ge e ate
egula
i come
while
mai tai i g
fi a cial
secu ity.

Gove me t-backed
fixed-i come
p oducts
a e
amo g
the
optio s
available
to
se io
citize s
seeki g
p edictable
etu s.

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Resig s:
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G oup
Stocks
Fall,
TCS
Dow
Nea ly
4%

Se io
Citize s
Savi gs
Scheme

The
Se io
Citize s
Savi gs
Scheme
(SCSS)
is
available
to
citize s
aged
60
a d
above.

The
i vestme t
a ge
me tio ed
is
Rs
1,000
to
Rs
30
lakh,
with
a
five-yea
te u e
a d
a
a ual
i te est
ate
of
8.2
pe
ce t.

Post
Office
Time
Deposits

Post
Office
Time
Deposits
offe
fixed
te u es
of
o e,
two,
th ee
a d
five
yea s.

The
i te est
ates
me tio ed
a ge
f om
6.9
pe
ce t
to
7.5
pe
ce t,
p ovidi g
fixed
etu s
with
qua te ly
compou di g.

Othe
Post
Office
Savi gs
Optio s

Reti ees
ca
also
co side
p oducts
such
as
the
Post
Office
Savi gs
Accou t,
Mo thly
I come
Scheme
(MIS)
a d
Natio al
Savi gs
Ce tificate
(NSC).

The
i te est
ates
cited
fo
these
p oducts
a ge
betwee
6.7
pe
ce t
a d
7.4
pe
ce t,
alo g
with
featu es
such
as
capital
p otectio ,
p edictable
etu s
a d
tax
be efits
depe di g
o
the
scheme.

Reti eme t
Savi gs
Need
Regula
Review

Leavi g
a
EPF
bala ce
u touched
may
appea
co ve ie t,
but
the
accou t’s
i te est-c editi g
pe iod
has
a
defi ed
limit.

Fo
someo e
eti i g
at
58,
the
th ee-yea
post- eti eme t
i te est
wi dow
p ovides
some
time
befo e
the
accou t
becomes
i ope ative.
Afte
that,
the
bala ce
emai s
available
fo
withd awal,
but
o
f esh
i te est
is
c edited.

Fo
eti ees,
the
b oade
takeaway
is
that
eti eme t
savi gs
should
ot
simply
be
left
o
autopilot.
Fixed-i come
i vestme ts
a d
othe
eti eme t
assets
should
be
eviewed
half-yea ly
o
a ually,
with
cha ges
made
whe
equi ed.

The
EPF
co pus
may
have
bee
built
ove
decades,
but
what
happe s
to
that
mo ey
afte
eti eme t
still
equi es
a
active
fi a cial
decisio .

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