Withdraw PF Money: It is often seen that when people change jobs, they withdraw PF money many times. Is it right to do so? Let us know.
Withdraw PF Money: If you have lost your job or recently left your old job or are stuck in an emergency, then you may feel like withdrawing your provident fund i.e. PF money. However, experts always tell you to choose the option of not withdrawing PF balance. If you withdraw the money, you miss out on the investment you have made for a better future. Besides, your chances of getting regular pension through Employee Pension Scheme (EPS) also gets affected. Let us understand what is the real reason behind this.
You can transfer money with new job
After leaving the job, you should withdraw PF money only when there is an emergency. Even after leaving the job, interest continues to be earned on the amount deposited in your PF account. Also, it can be transferred to a new company as soon as you get a new job in a new firm. According to the official website of EPFO, a person who does not have a job cannot contribute to the PF account. An employee cannot contribute to EPF after leaving the job, as any contribution made by the member must be matched with the employer’s share of contribution.
This is why you get money instantly
If you leave your old job and join a new company, then you can transfer your entire PF amount to the new company. Your PF account will be considered to be running continuously and your pension scheme will not be stopped due to this. If you do not withdraw after retirement, you can continue earning interest on your PF deposits. Please note that your account will become inactive after three years of retirement. There is no time limit for withdrawal of provident fund dues. Only in case of resignation from service (not retirement), a member has to wait for two months for withdrawal of PF amount. These days the government releases money immediately after telling the region of Covid.
What is the disadvantage of withdrawing PF money?
What are the disadvantages of withdrawing PF money? To understand this, first we have to understand how much PF is deducted on a fixed salary. If this happens, how much money will you get when you retire? Suppose the salary of a person is Rs 15 thousand per month. According to the current PF interest rate, he will get 8.15% interest. According to the salary of Rs 15 thousand, PF of Rs 2351 will be deducted per month. In such a situation, a total of Rs 4.34 lakh will be collected in 10 years. This amount will increase to Rs 14.11 lakh in 20 years. If he has started working at the age of 20, then after 40 years when he will be 60 years of age, this amount will reach 86 lakhs. With this figure you can guess that if your salary is decent then you should not think about withdrawing PF at all.