EPF

EPF, the Employees’ Provident Fund, is a retirement savings scheme for salaried workers. Each month a part of your salary goes in, your employer adds a matching share, and it earns interest set by the government. You reach it online using your UAN.

How the contributions work

Both you and your employer put in 12% of your basic pay plus dearness allowance each month. Your full share goes to the provident fund. Of the employer’s share, a slice is diverted to the Employees’ Pension Scheme, which pays a pension later, and the rest joins the provident fund. So your EPF balance is built from your contribution, part of the employer’s, and the interest on both.

The interest and the tax break

The government fixes the EPF rate each year; it was 8.25% for 2024-25. The interest compounds, and within the rules the contributions, the interest and the final amount are tax-favoured, which makes EPF one of the most effective long-term savings most salaried people have. Confirm the current rate on epfindia.gov.in, since it is reviewed yearly. See how it sits against other safe routes in the small savings rates chart.

Reaching and moving your money

Your UAN is a permanent number that ties your EPF across jobs, so when you change employers you transfer the balance rather than start over. You can check the balance and passbook online, and withdraw fully or in part under set conditions, for example after a period without covered employment or for specific needs. The exact withdrawal rules are detailed and change, so read PF withdrawal rules and how to activate your UAN. EPF sits alongside the PPF, which anyone can open, salaried or not.