If you are a salaried employee, a part of your salary is automatically deducted every month for EPF, which stands for Employees’ Provident Fund.
Did you know? By contributing just Rs 5,000 every month to your EPF, you can build a retirement fund of Rs 3.5 crore!
EPF is a retirement savings scheme managed by the government through the EPFO (Employees’ Provident Fund Organisation).
Under this scheme, an employee contributes 12% of their basic salary. The employer also contributes—3.67% goes to EPF, and 8.33% is added to the pension scheme (EPS).
The government also provides a fixed yearly interest on your EPF savings. Currently, the interest rate is 8.25%. This helps your money grow over time.
Example:
If your monthly salary is Rs 64,000, then your basic salary will be around Rs 31,900.
Employee’s contribution: Rs 3,828
Employer’s contribution: Rs 1,172
Total EPF deposit per month: Around Rs 5,000
If your salary increases by 10% every year, your EPF contribution will also increase. On top of that, you’ll continue to earn 8.25% interest on the growing balance.
Now, let’s assume a person starts working at the age of 25 and continues paying into EPF until the retirement age of 58.
That gives a total working period of 33 years.
Total EPF contribution over 33 years: Around Rs 1.33 crore
Total retirement fund including interest: Around Rs 3.5 crore
EPF not only helps in saving money but also provides a pension (through EPS) and insurance benefits.
That’s why it is considered one of the safest and most trusted retirement plans in India.
