EPF Interest: Will You Still Earn Interest if You Lose Your Job? Here’s What the Rules Say
Employees working in the private sector contribute to the Employees’ Provident Fund (EPF), depositing 12% of their basic salary every month. This fund not only acts as a retirement savings plan but also earns interest credited annually by the government. A common question arises: what happens to EPF interest if you lose your job?Interest on EPF After job LossFor Accounts Active Less Than 3 YearsIf you leave your job and do not transfer your EPF balance to a new employer, interest is still credited for the first 3 financial years after leaving employment.After this period, the EPFO may stop paying interest until the account is reactivated or the funds are withdrawn.For Accounts Older Than 3 YearsOnce the EPF account has been inactive for more than 3 years, no interest is credited.To continue earning interest, it is advisable to either transfer the EPF balance to a new employer or keep it active via the Universal Account Number (UAN) system.What You Can Do to Continue Earning InterestTransfer EPF to New EmployerThe easiest way to keep earning interest is to link your previous EPF account to your new job.Maintain UAN AccountEnsure your UAN is active and KYC-compliant. This helps in continuous interest accrual and easy withdrawals.Consider Partial WithdrawalIf you are unemployed and need funds, you can partially withdraw EPF for personal expenses, though this reduces your retirement corpus.Key TakeawayEven if you lose your job, the government continues to pay interest on your EPF account for a limited period of 3 years. To maximize returns and ensure continuous interest accrual, it’s best to transfer your EPF to a new employer or maintain your account via UAN. Staying informed about EPF rules ensures that your retirement savings keep growing, even during employment gaps.Disclaimer:The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of any agency, organization, employer, or company. All information provided is for general informational purposes only. While every effort has been made to ensure accuracy, we make no representations or warranties of any kind, express or implied, about the completeness, reliability, or suitability of the information contained herein. Readers are advised to verify facts and seek professional advice where necessary. Any reliance placed on such information is strictly at the reader’s own risk.