Crores of members of the Employees Provident Fund Organization (EPFO) often ask the question that after leaving the job or retirement, till when they get interest on their EPF account. Many people think that interest stops as soon as they leave the job or immediately after retirement, but the rules of EPFO are different from this. The organization has clarified that the interest does not stop just because the contribution stops. However, in certain circumstances the account becomes “inoperative” after a certain period and no interest is earned thereafter.
You get interest even after leaving the job
If an employee leaves the job, becomes unemployed for some time or takes a career break, even if new contributions do not come to his EPF account, interest continues to be earned on the amount deposited in the account. That means there is no direct relation between stopping of contribution and stopping of interest. Therefore, there is no need for employees to panic even in case of change of job or absence of job for some time. Their EPF balance keeps earning interest as per the rules.
When does interest stop after retirement?
According to EPFO rules, if an employee retires at or after 55 years of age, his EPF account is considered active for 36 months (three years) from the date of retirement. During this period, interest continues to be earned on the amount deposited in the account. If the amount is not withdrawn or the account is not settled within this period, the account is considered inoperative. After this, no further interest is added to that account.
What is an inoperative account?
Inoperative account is that EPF account in which there is no claim or transaction for a long time. EPFO stops paying further interest on such accounts. However, the principal amount deposited in the account remains safe and the member can claim the same later as per the rules.
What should employees do?
Experts say that on changing jobs, the old EPF account should be transferred to the new employer’s account through UAN. At the same time, even after retirement, it is important to keep a regular eye on the account status. If withdrawal has to be made, it is better to file the claim on time so that there is no loss related to interest.
By having correct knowledge of EPFO rules, employees can manage their retirement savings better. Therefore, it is not right to assume that after leaving the job or retiring, the interest on EPF will stop immediately. As per the rules, interest continues to be received for the stipulated period, but leaving the account inactive for a long time may stop the benefit of interest in future.
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