Don’t let your EPF go dormant: Safeguard your retirement corpus | Fusion - WeRIndia

A secure retirement demands steady saving and smart planning.

The Employees’ Provident Fund (EPF) plays a crucial role in this process; yet, many employees overlook its upkeep after job changes or breaks.

Your EPF contributions stop when you leave a job covered under the EPF Act or join one that isn’t.

Although contributions stop, the account remains active for up to 36 months.

During this time, it continues to earn interest at the prevailing rate set by the EPFO.

However, after 36 months of inactivity, the account becomes inoperative.

No further interest accrues, though your balance remains safe with the EPFO.

You can still withdraw the amount when eligible, but it stops growing over time.

Withdrawals come with tax implications. If you withdraw before completing five years of continuous service, the entire amount, your contribution, employer’s share, and interest, is taxable.

On the other hand, if the money stays invested and keeps earning interest during the active phase, it remains tax-free.

When you switch jobs, always transfer your EPF balance using your Universal Account Number (UAN).

This ensures continuity, avoids tax on early withdrawal, and helps your money grow without interruption. The EPFO portal makes this transfer process simple and efficient.

Leaving accounts dormant may lead to complications later. Outdated KYC or bank details can delay withdrawals.

Lost interest and tax savings can erode your future wealth. So, review your EPF details regularly and update them when needed.

Avoid maintaining multiple EPF accounts. Consolidate them through the EPFO portal. This helps you stay organised and financially disciplined.

Your EPF is a vital long-term savings tool. Actively managing it, transferring it when you change jobs, and keeping your details updated ensure steady growth.

This protects your retirement fund from loss of interest or taxation, helping you build a secure financial future and a stronger retirement corpus over time.

Image Credit: Aviator423, CC BY-SA 4.0, via Wikimedia Commons

Image Reference: https://commons.wikimedia.org/wiki/File:Employees%27_Provident_Fund_Organization_office_at_Silva_Cross_Road_at_Falnir_in_Mangalore.jpg