PF Withdrawal Rules: Is it necessary to withdraw PF after leaving the job or not? Does PF account become inactive? What do the new rules of EPFO say, for how long is interest available on PF and what is the right decision – read the complete information in easy Hindi.
Nowadays, it is no longer unusual to change jobs or take a break for a few months. Switching jobs has become a part of career growth, especially in the private sector and Gen Z professionals. But as soon as an employee leaves his job, the first question that comes to his mind is, what to do with PF after leaving the job? Amidst this confusion, many people withdraw money from their PF account in a hurry without complete information, which can cause loss in future.
Is it the right decision to withdraw PF as soon as you leave the job?
The common belief is that PF should be withdrawn as soon as you leave the job, but the reality is different. If you are looking for a new job or are taking a break for some time, it is not considered wise to withdraw PF only due to fear of insecurity. PF is a long-term retirement savings, premature withdrawal of which can weaken your future financial planning. Experts believe that unless there is a serious financial compulsion, leaving the PF in the account is a better option.
If you lose your job, does your PF account also come in danger?
The biggest fear after leaving the job is that the PF account may get closed or the money may get stuck. But EPFO rules prove this fear completely wrong. Even if there is no new contribution in your PF account after leaving the job, the amount deposited till now remains completely safe. The account is neither closed nor your money is held in any way.
Interest on PF continues to be received even without contribution
Very few people are aware that interest on PF is not available only during employment. According to EPFO, if an employee leaves the job before the age of 58 years, his PF account continues to earn interest till the age of 58 years. This means that despite no new money coming in for many years, interest keeps getting added on your deposited amount and the fund keeps increasing gradually.
PF becomes inactive after three years – truth or illusion?
It has been said for a long time that if there is no deposit in PF for three years, the account becomes inactive. But this information is now completely outdated. In the year 2016, the government changed the rules and made it clear that no PF account will be considered inactive before the age of 58 years. This means that neither the account will be closed, nor the interest will stop nor the deposited money will be unsafe.
Why can being hasty in withdrawing PF before a new job prove costly?
If you are preparing for a new job after leaving the job and there is a possibility of getting employment soon, then withdrawing PF during this time can be harmful. This reduces your retirement savings and in some cases can also lead to tax implications. Apart from this, the long term benefits of PF also get lost. In such a situation, it is better to get the PF transferred after getting a new job.
Only correct information can save your hard earned money.
Every decision related to PF is directly related to your future financial security. Decisions taken based on rumours, social media posts or incomplete information may lead to regrets later. It is important to understand that PF does not end by leaving the job, interest continues to accrue even if there is no contribution and your money continues to grow safely till the age of 58 years. Only a decision taken with knowledge of the correct rules can protect your years of earnings.