EPFO adds 18.92 lakh members: Why investing in EPF matters more than ever

According to the provisional payroll data released by the Employees' Provident Fund Organisation (EPFO) in June 2024, April 2024 saw 8.87 lakh new members registering. This surge indicates a notable rise in membership compared to earlier months, suggesting a positive trend in job opportunities.

There was a 23% rise in the number of members who left and subsequently re-entered the EPFO, indicating heightened job mobility as members secure their long-term financial stability, reported The Statesman

If you're new to seeking high-interest investment opportunities with minimal market risk, directing a portion of your earnings into Employees Provident Fund (EPF) accounts can build a substantial corpus over time. The EPFO plays a crucial role in securing long-term financial stability for employees in India through:

• Promoting regular savings: Participation in an EPF account requires consistent contributions from both employers and employees, fostering financial discipline and steadily accumulating a significant retirement fund over the years.
• Assured government returns: Each year, the Indian government determines the interest rate for EPF contributions, which generally exceeds rates offered by traditional savings accounts, ensuring a secure and dependable investment option.
• Tax advantages: Contributions made to EPF accounts by both employers and employees are eligible for income tax exemptions up to specified limits. This enables employees to enhance their retirement savings while lowering their current tax liabilities.

Here are some supplementary advantages provided by the EPFO that enhance long-term financial stability:

• Retirement benefits: Eligible employees can receive a monthly pension post-retirement through the Employees' Pension Scheme (EPS), which is integrated with the EPF for enhanced social security.
• Life insurance coverage: The EPFO offers life insurance benefits to its members through the Employee Deposit Linked Insurance (EDLI) scheme. Should a member pass away during their service tenure, their family receives a lump sum payment as compensation.
• Withdrawal facilities: Members have the option to withdraw a portion of their EPF savings under specific conditions, including medical emergencies, educational expenses for children, or purchasing a home.

In summary, the EPFO establishes a robust social security framework that secures the financial future of employees post-retirement. It encourages disciplined saving, offers competitive returns, and includes additional benefits such as pensions and insurance coverage.