New Delhi:
You can benefit from three different plans with the Employees Provident Fund Organization (EPFO).
When you open an account, you not only earn more interest than a Fixed Deposit (FD), but the government also guarantees the safety of your money.
Additionally, you receive free life insurance worth a lot of money.
For private sector employees, it’s important to open a Provident Fund account (PF Account).
Every month, a certain amount is taken from your salary and put into this account for the future. Your employer also contributes to this account.
Three EPFO Schemes
EPFO manages three schemes simultaneously:
- EPF Scheme 1952,
- Pension Scheme 1995 (EPS), and
- Employees Deposit Linked Insurance (EDLI) scheme.
Who benefits from this? All employees with an EPFO account enjoy these advantages.
Every employee gets insurance benefits under the EDLI scheme, with a coverage of Rs 7 lakh.
This means that if something unfortunate happens to the employee, their family gets Rs 7 lakh as insurance.
What’s unique is that the employer invests in the EDLI scheme, and the employee still gets the benefits without investing money.
When can you benefit from the scheme? EPFO introduced this scheme in 1976, covering all companies.
You can choose a different insurance plan if you want more coverage. If not, you’ll enjoy the benefits of both.
The employer invests 0.5 percent of the employee’s basic and DA amount as a premium, with a maximum limit of around Rs 75.
You only get the scheme’s benefits if you consistently work and are active EPF members.
How much is paid for insurance? EPFO pays up to 35 times the employee’s salary under the EDLI scheme, with a maximum monthly salary limit of Rs 15,000.
This means the employee receives Rs 5.25 lakh from EPFO. Additionally, the organization provides a bonus of around Rs 1.75 lakh, making a total insurance cover of Rs 7 lakh.
Guaranteed Higher Interest and Security
When you open a PF account, you not only enjoy insurance benefits but also earn higher interest than an FD.
Compared to the State Bank of India’s FD interest of 7 percent, the PF account offers 8.15 percent interest.
The government guarantees the money in your PF account, ensuring your deposited money is safe.
