The Employee Provident Fund Organization may start paying interest on the unclaimed money lying idle in the dormant accounts from April 1, The Times of India newspaper reported.
According to estimates, there are around 8.55 crore dormant provident fund accounts with close to Rs 30,000 crore lying idle in these accounts.
According to current rules, a provident fund account becomes dormant if no contribution has been made for a period of 36 months. No Interest is paid on such dormant account.
Generally, people fail to transfer or withdraw money from their provident fund account after changing or leaving jobs. The retirement fund body had stopped crediting interest to such accounts in active accounts from April 1, 2011.
Last year, the EPFO has launched a special derive for facilitating provident fund account holders claim their money lying idle in these accounts.
The EPFO had recently raised the interest rate for provident fund deposits for this financial year (2015-16) to 8.8 per cent from 8.75 per cent in the year. (Read)
The retirement fund body, EPFO, has also tightened norms relating to withdrawals from provident fund account. The age limit for withdrawal from a provident fund account on retirement has been raised from 55 years to 58 years.
As per earlier norms, a person was allowed to withdraw 90 per cent of his accumulations from the PF account at the age of 54 years and their claims were settled just one year before their retirement.
Another big change is that a person can only withdraw his contribution and interest earned instead of 90 per cent of the total accumulation earlier. (Read)
(With agency inputs)
According to estimates, there are around 8.55 crore dormant provident fund accounts with close to Rs 30,000 crore lying idle in these accounts.
According to current rules, a provident fund account becomes dormant if no contribution has been made for a period of 36 months. No Interest is paid on such dormant account.
Generally, people fail to transfer or withdraw money from their provident fund account after changing or leaving jobs. The retirement fund body had stopped crediting interest to such accounts in active accounts from April 1, 2011.
Last year, the EPFO has launched a special derive for facilitating provident fund account holders claim their money lying idle in these accounts.
The EPFO had recently raised the interest rate for provident fund deposits for this financial year (2015-16) to 8.8 per cent from 8.75 per cent in the year. (Read)
The retirement fund body, EPFO, has also tightened norms relating to withdrawals from provident fund account. The age limit for withdrawal from a provident fund account on retirement has been raised from 55 years to 58 years.
As per earlier norms, a person was allowed to withdraw 90 per cent of his accumulations from the PF account at the age of 54 years and their claims were settled just one year before their retirement.
Another big change is that a person can only withdraw his contribution and interest earned instead of 90 per cent of the total accumulation earlier. (Read)
(With agency inputs)
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