Higher Interest To Free Insurance, EPFO Provides Account Holders With Various Benefits – News18

The Employees Provident Fund Organisation (EPFO) provides a complete scheme that gives workers with a number of benefits. Account holders not solely obtain larger rates of interest on their financial savings, in comparison with Fixed Deposits (FD), but in addition profit from the federal government’s safety assure. Additionally, the scheme supplies free life insurance coverage protection value lakhs of rupees. Private sector workers are mandated to determine a Provident Fund account (PF Account), with a particular sum deducted from their month-to-month wage and reserved for future wants. Employers additionally make a contribution to this account. The EPFO oversees three simultaneous schemes: the EPF Scheme 1952, the Pension Scheme 1995 (EPS), and the Employees’ Deposit Linked Insurance (EDLI) scheme.

All workers opening an account with EPFO are eligible for advantages underneath the EDLI scheme. This scheme supplies time period insurance coverage of Rs 7 lakh on the PF account. In the occasion of an worker’s unlucky demise, the household is entitled to Rs 7 lakh as insurance coverage protection. Importantly, whereas workers spend money on the PF account and EPS, it’s the employer who initiates investments within the EDLI scheme, making certain that workers can avail themselves of its advantages.

The EPFO instituted this scheme in 1976, together with all corporations inside its jurisdiction. Employees can decide out of the scheme in the event that they choose a better-protection insurance coverage plan; in any other case, they will avail the advantages of each plans. As a part of the initiative, employers make investments 0.5 p.c of the worker’s fundamental and DA quantity as a premium, with a most restrict of round Rs 75. It’s essential to emphasize that the scheme’s advantages are contingent upon sustained employment and energetic membership in EPF (Employees Provident Fund).

EPFO provides insurance coverage protection as much as 35 occasions an worker’s wage underneath the EDLI scheme. It’s vital to spotlight that the utmost month-to-month wage thought of for this calculation is capped at Rs 15,000. Consequently, an eligible worker can obtain Rs 5.25 lakh from EPFO via this scheme. Furthermore, the organisation supplies an extra bonus of roughly Rs 1.75 lakh. In complete, the initiative grants a sum of Rs 7 lakh as insurance coverage protection.

When workers open a PF account, they not solely get insurance coverage protection but in addition get pleasure from larger rates of interest on their deposits in comparison with Fixed Deposits (FD). For instance, SBI, the most important authorities financial institution, provides a median rate of interest of seven p.c on a 5-yr FD. In distinction, a PF account supplies an 8.15 p.c rate of interest, beforehand reaching as much as 9 p.c.