In case you have started your Employees’ Provident Fund journey very late in life, there is no need to worry as you can still accumulate a huge amount of money provided you keep investing in your EPF account diligently. The big profit that you can accumulate is courtesy of the EPF interest rate of 8.25%, which is one of the best risk-free tools available anywhere. The EPF interest is mostly higher than any other bank fixed deposits, but it may just be lower than what equity investment can give. However, stock market investment comes with a number of high risks. So, how can you earn over Rs 4 crore through the EPF account?
Let us say that an investor started his journey in EPF at the late age of 30. Most people generally get a job at around 25 years of age, but that may not apply to everyone, or the establishment where they worked may not have offered this option. The monthly basic salary of this person is (basic + DA) is Rs 90000 and the EPF contribution is 12%. Considering this is EPF, the contributions will be carried on till retirement, which is at age 60. And another given that we take in this case is that the salary is expected to increase by a minimum of 6% annually. Some may get salary increments that are greater than this while others may get a bit less.
Another variable that may come into play is the EPF interest rate. The Employees’ Provident Fund Organisation (EPFO) Central Board of Trustees reviews the interest rate on a yearly basis and sets it in consultation with the Finance Ministry. For our purposes, for 2024, EPF interest rate has been set at 8.25%.
Now that all the givens are in place, the EPF interest rate calculator provides the kind of gains this account holder can look forward to. Due to the magic of compounding (annually on year-end balance), this person can get a sum of Rs 4,54,90,876.
Interestingly, this massive sum was created on the back of an investment of just Rs 1,43,51,441! On this amount, the investor got a total interest of Rs 3,11,39,435. The gains here are indicative and may vary.
Clearly, EPF interest rate along with the magic of compounding can deliver major gains as long as the investor does not break the service continuity in any way or withdraw money from the account.
(Disclaimer: This article is only meant to provide information. News9live.com does not recommend buying or selling shares or subscriptions of any IPO and Mutual Funds.)
Even if a person starts his EPF journey late, a substantial amount can be generated. Here we look at how an EPF interest rate of 8.25% can generate Rs 4 crore corpus. Personal Finance Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
