One of the highest interest rates available in any money-growing scheme is being provided by the Employees’ Provident Fund Organisation (EPFO). For employees across the country, this is a boon and they should always look at growing their money pot as much as possible and as quickly as possible. While changing jobs can give the biggest jumps, what every employee should not forget is that the EPF interest rate keeps adding to their retirement fund day-after-day and they should nurture it as much as possible.
EPFO Tips
Three things an employee should do, to benefit from the EPF interest rate, which is at 8.25% currently, is to make sure that he retains his job and the money keeps flowing into his EPF account without any breaks. Another important thing to look for is to make sure, every time the employee changes his job, he merges the new employer details with his UAN number. And thirdly, he should make sure that no withdrawals of money happen for any reason. That will be a wealth destroyer. If that is ensured, there is no way the employee will ever be short of money throughout his life.
EPF interest rate windfall
Now, as to the question of how to make this high EPF interest rate turn an employee’s Rs 45000 basic salary into over Rs 3 crore? Well, let us assume that the employee starts his EPF journey at the age of 25 with this salary. His contribution is 12% of his pay into his EPF account. The employer’s amount that flows into the employee’s EPF account is 3.67%. We will also assume that he will get a yearly increment in his job of 6%. Now, the EPF calculator shows that the employee, on retirement, will get a princely sum of Rs 3,84,98,368!
In effect, this high EPF interest rate, combined with the employee’s disciplined approach, has ensured that he retires as a multiple crorepati. And this is on the basis of just his EPF account. He may have other investments too, including the Public Provident Fund (PPF), stock markets or bank fixed deposits to add to his retirement nest egg.
Note: The sums mentioned here are estimates and the actual amounts will be mentioned in the EPF passbook.
EPF interest rate of 8.25%, combined with the employee’s disciplined approach, will ensure that he retires as a multiple crorepati. Personal Finance Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
