A government-backed retirement savings scheme EPF (employee provident fund) that is regulated by EPFO. In this scheme, both employee and employer contribute 12 per cent of the employee’s basic salary and darkness allowance (DA). EPFO declares interest rates for EPF every year. The current EPF interest rate is 8.25 per cent.
The interest on EPF is tax-free. When employees retire, they get a lump sum payment that includes all accumulated interest. Before retirement, they can withdraw part of their EPF for education, marriage, and house construction. EPFO assigns each member a 12-digit number known as the UAN (universal account number). Even if an employee changes employers, his or her UAN remains the same.
Also Read: EPF Balance Check: Here are 5 easy ways to check your EPF account balance — a step-by-step guide
How to access the EPF account?
The EPF subscribers can have online access to their PF accounts. They can also withdraw the amount and check the balance on EPFO Portal.
EPF withdrawal rules: Retirement and resignation
You can withdraw the entire PF amount once retire at the age of 58. On the other hand, you can also withdraw your provident fund after two months of resigning from your job.
How to accumulate over Rs 2 crore retirement corpus with a Rs 20,000 basic salary?
If your monthly basic salary is Rs 20,000 per month and you start investing at 21 years of age then you can accumulate a fund of Rs 2,10,31,808 at retirement.
Calculations of accumulating over Rs 2 crore fund
On a yearly hike of five per cent in salary, you can invest Rs 45,43,154 starting at 21 till retirement. On this, you will get an interest of Rs 1,64,88,654 at an 8.25 per cent annual rate. The total maturity amount will be Rs 2,10,31,808.
Total years of investment
As per the above calculation, you will have to invest for around 39 years to make a corpus of Rs 2,10,31,808.
