Whenever it comes to a provident fund, the first thing that comes to mind is that it gets very good interest. This is the reason why most people recommend not to withdraw its money early, so that maximum interest can be earned. It has been decided to pay 8.5 percent interest rate for the financial year 2019-20. But do you know that these money do not always earn interest for you. That is, there are some situations when interest on PF money is not available. Let’s know about them.
PF does not get interest on these 4 occasions
1- When the EPF Subscriber retires from his job after the age of 55 years.
2- When the EPF Subscriber dies.
3- When the EPF Subscriber permanently leaves the country and settles abroad.
4- After the term of the job, if there is no claim for EPF for 36 months.
This time the payment will be in two installments
The Employees Provident Fund Organization (EPFO), which manages the Provident Fund, has decided to make partial payment of fixed interest on provident fund for FY 2019-20 to its six crore shareholders. Out of the fixed rate of 8.50 percent on EPF, it has been decided to pay 8.15 percent interest payment at present. The remaining 0.35 percent interest will be paid into the EPF accounts of the shareholders by December this year.
Why is the government paying interest in two installments?
The government invests the money invested in EPF in many places. In this sequence some money is also invested in the stock market. The government invests EPF money in government securities, debt instruments and equities i.e. the stock market. The stock market has been badly affected by Corona, so the government has decided to pay some interest later. The government is waiting for the stock market to move again, so that better returns can be achieved. The government hopes that by December, investment in equities can yield better returns.