withdraw EPF amount before leaving job for MS: A Guide

Congratulations for your upcoming Masters of Science (MS)! Before embarking on this next chapter in your life, let's address a common concern about bringing your Provident Fund (PF) account with you: What happens if you withdraw your EPF amount before leaving your job?

Withdrawal and Account Closure

If you withdraw your Employee Provident Fund (EPF) amount, your current EPF account with your current employer will be closed. This closure means that you will not be able to link this account to a new employer after the withdrawal. Your retirement savings in this account will no longer be accessible until you rejoin a new employer with a fresh EPF account.

New EPF Account

When you start working with a new employer, you will need to open a new EPF account. Your new employer will provide you with a new Universal Account Number (UAN) for your new EPF contributions. Remember, unlike when you're transferring your existing EPF amount, you will not be able to link your old EPF account to the new UAN if you have already withdrawn the funds.

Transfer Option

Instead of withdrawing your EPF amount, consider transferring it to your new employer's EPF account. This transfer ensures that your retirement savings remain intact and that the continuity of your EPF account is maintained. This is often a better option if you plan to return to the workforce in the future and want to maintain a seamless connection to your existing EPF benefits.

Rejoining EPF

Even if you return to employment after two years, you can open a new EPF account with your new employer. However, you cannot link your old EPF account since it has been closed. Instead, you'll need to start anew with the new contributions.

What Happens if You Don't Withdraw?

If you choose not to withdraw your EPF amount and return to India, your account will continue to earn interest for the next three years. After three years, the account will become dormant and stop earning interest. You can always reactivate your account when you return to employment.

Additional Tips

If you haven't withdrawn from your EPF account and are returning to work, simply provide your UAN number to your new employer. They will use this information to link your new EPF contribution to your ongoing retirement savings.

Conclusion

It is usually advisable to transfer your EPF balance rather than withdrawing it if you plan to maintain a continuous connection with your retirement savings. This way, you can continue to enjoy the benefits of your EPF while transitioning to your next career phase without losing any of your hard-earned savings.

Congratulations once again on your MS journey. May it bring you success and fulfillment!