EPFO Update: Interest Policy for Inactive Provident Fund Accounts

Provident Fund (PF) accounts continue earning interest until the account holder turns 58, even without contributions. This clarification from the EPFO dispels the myth of interest stopping after three years of inactivity.

PF Interest Update: Provident Fund (PF) savings are crucial for every employed individual, serving as a safety net during emergencies. Job changes often lead to a halt in PF contributions, raising concerns about interest accrual on inactive accounts. Let's explore the EPFO rules governing this.

Does Interest Stop After 3 Years of Inactivity?

Contrary to the misconception that interest stops after 3 years of inactivity, the EPFO clarifies that interest continues to accrue on your PF account until you reach 58 years of age, regardless of contributions. Even after leaving a job, you can maintain your PF membership.

Why Does Interest Continue Without Contributions?

In July 2017, the Ministry of Labour and Employment revised the rules for inactive PF accounts. Now, accounts become inactive only when the member turns 58. Until then, interest continues to accrue irrespective of contributions. Recall that 12% of your salary is contributed to your PF account monthly, matched by your employer.

When Can You Withdraw 100% of Your PF?

You can withdraw 100% of your PF balance under specific circumstances: upon reaching 58 years of age or if you've been unemployed for over two months.