In a big relief for nearly 10 crore employees, the money remaining idle in provident fund deposits for 36 months or more will now earn interest.
The inoperative or idle PF accounts were not paid interest since 2011. In case of PF accounts, if there is no contribution paid during the last 36 months, the accounts were classified as inoperative. Thus, earlier, if an employee quit his/her job and failed to transfer or withdraw the PF money within 36 months, the account turned inoperative and did not fetch any interest.
In a notification dated November 11, the Labour Ministry said PF accounts of persons “retired from service after attaining age of 55 or who migrated abroad permanently” will now be considered inoperative.
This in effect means that the PF accounts of subscribers till they reach 58 years will not be considered ineffective and thus continue to fetch interest. The Employees’ Provident Fund Organisation (EPFO), which administers the provident fund deposits, is a statutory body under the Ministry of Labour and Employment.
Union Labour Minister Bandaru Dattatreya had earlier said that about Rs. 42,000 crore is now lying in “inoperative accounts” across the country.
The EPFO announces interest rate each year and the interest rate for 2015-16 was fixed at 8.8 per cent. The retirement fund body is yet to announce interest rate on PF deposits for this year.
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