Provident Fund: If you do a government or non-government job, then this news can be very special for you. Let us tell you that PF is deducted for those who do jobs, and the Employee Provident Fund (EPF) gives strong financial support to them. Every month, a part of the employee’s basic salary is deposited in it, and the company (employer) also contributes the same part. This fund is useful at the time of retirement, which makes it easier to manage life. On the other hand, if you contribute 5000 rupees every month to EPF and deposit it for a long time without withdrawing, then a fund of about ₹ 3 crores can be prepared by retirement.
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How much money is deducted from PF?
According to the rules of EPFO, the employee has to deposit 12% of his basic salary and dearness allowance (DA) in PF. The company also contributes up to 12%, but its distribution is such that 3.67% goes to EPF, along with this, 8.33% goes to EPS, which is received in the form of a pension, and some part goes to the insurance scheme (EDLI).
How much interest is received on PF?
Currently, the government is giving 8.25% annual interest on EPF. This interest is directly added to your PF account, due to which your savings increase every year. The interest rate can be changed from time to time.
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How will a fund of Rs 3 crore be created by saving Rs 5000 per month?
Suppose a person named A starts a job at the age of 25. His basic salary is Rs 35,200. Out of this, 12% i.e., Rs 3,828, is deducted from EPF every month. The company also puts 3.67% i.e., Rs 1,172, in EPF. In this way, a total of ₹5000 is being deposited in his PF account every month. If his salary increases by 10% every year, and he keeps getting an interest of 8.25%, then after contributing continuously for 33 years, about 3.8 crore rupees can be deposited in his PF account. Out of this, only 1.33 crore rupees will be the amount deposited by him and the company; the rest of the amount will increase with interest.