After the closure of a company, handling the Public Provident Fund (PF) and Employee Provident Fund (EPF) becomes a critical concern. With the dynamic changes in policy, it's essential to understand the latest rules and options. This article aims to provide a comprehensive guide to navigating PF and EPF withdrawal post company closure.
Understanding the Recent Changes in PF and EPF Withdrawal Rules
As per the latest rule from the Employees’ Pension Fund Organization (EPFO), employees are now allowed to withdraw up to 100 percent of the EPF corpus after 2 months of unemployment, provided they meet certain conditions. Previously, the withdrawal was limited to 75 percent, with the remaining amount to be transferred to a replacement EPF account after obtaining new employment. This shift in policy ensures maximum accessibility to one's provident fund during unemployment periods.
For those who have left the job and are not placed anywhere for at least 3 months, they can withdraw the full PF amount. This is particularly beneficial if they have worked less than 9.5 years, as they are entitled to withdraw the entire pension amount as well.
Exploring PPF Withdrawal Options: Maximizing Your Savings
Once a Public Provident Fund (PPF) account matures, there are three primary options available to manage the funds:
Option 1: Complete Withdrawal of Amount and Interest
Option one involves the complete liquidation of your deposited amount along with the interest earned. This works best for those who require immediate funds.
Option 2: Maintenance of Account Without Further Deposits
Option two allows you to keep the PPF account open and not make any further deposits. You can withdraw a sum of your choice once a year, with the remaining amount continuing to accrue interest. This option is ideal for those who do not wish to contribute further to the PPF.
Option 3: Continuous Investment into PPF
Option three involves maintaining your PPF account and choosing to continue investing in it. For this option, you need to submit a form to the bank within a year of maturity to continue investing. You are allowed to withdraw a maximum of 60 percent of the account balance at the start of this option. Thereafter, one yearly withdrawal is permitted. This option is suitable for individuals who do not need the money immediately and wish to secure their future or that of their offspring.
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Conclusion
With the evolving rules in PF and EPF withdrawal policies, it is crucial to stay updated on the latest developments. Whether you choose to withdraw your full PF amount or continue investing in your PPF, the options are now more flexible and accessible than ever. Together, we can create a more secure and equitable pension system for all.