PF Transfer: Why is transferring PF a better option when changing jobs? Understand here how you will benefit..
Through the EPFO scheme, employed persons can easily avail pension with a lump sum amount after retirement. EPFO holders deposit 12 percent of their basic salary every month in the PF account. The company also contributes as much as the employee.
Many times employees change jobs and at this time they withdraw the entire amount from the PF account. According to EPFO, doing so can end the PF membership of the employee. For this reason, EPFO holders are advised to transfer their PF account while changing jobs.
The employee gets a double benefit by transferring the old PF account to the new account. We will tell you how employees benefit from transferring the PF account.
Why PF account transfer is a good option
By transferring the PF account, the employee's membership does not end. Secondly, compound interest is received on the amount deposited in the PF account, that is, interest is received on interest. Compound interest proves to be very helpful in creating a big fund. Apart from this, if you contribute to the PF account for 10 consecutive years, then the employee also becomes entitled to a pension.
A big fund will be prepared by PF account transfer
You can create a big fund through a PF account transfer. Understand it like this if your basic salary is Rs 15 thousand, then every month you and the company together deposit about Rs 3600 in the PF account. Currently, EPFO is offering an interest of 8.5 percent. This means that in 15 years, a fund of about 12 lakh 94 rupees will be deposited.
Similarly, if you contribute for 30 years, then a fund of about 55 lakh 46 thousand, and after 40 years, a fund of more than 1 crore 29 lakh rupees will be prepared. Let us tell you that this fund is prepared only when there is a regular contribution in the PF account.
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