EPF stands for Employee Provident Fund and it is a scheme for advantages and financial support that individuals can have access to after retirement. It is governed by (EPFO) which is short for Employee Provident Fund Organisation.
Employees that are from the private sector are entitled to benefits after retirement if they function within the organized sector.
Unlike private sector employees, government workers are also qualified to have pensions. It involves funds that are collected on a monthly basis by the employee and employer.
A company that has over 20 employees needs to be registered under the EPF Act.
This scheme basically involves a certain sum of money that is paid from the employee’s salary towards this scheme and the employer also contributes an amount. This is done on a monthly basis and the money collected helps in supporting and ensuring the independence of an individual in the period after their retirement stage is reached.
What is an EPF Calculator?
Your savings can be calculated by using the EPF Calculator. The data and input have to be entered in the appropriate fields to get the output that is required.
Employee Provident Fund ensures that there are savings that people can rely on in case of any kind of discrepancies that may be related to an individual’s employment status. Tax-free returns are offered with EPF and if any amount of money is withdrawn after an employment period of five years, there is no TDS and it is tax free.
The details related to retirement age, monthly salary, annual salary increase that is expected, and the contribution to EPF need to be listed down in the necessary areas that the calculator has provided to ascertain the estimated corpus on retirement.
An employee’s retirement can be effectively planned if the estimated value of the retirement is known.
How is an EPF Calculator helpful?
Calculating the amount of interest that has been built up and keeping track of where the money that has been earned is stored becomes very effortless with the help of this calculator.
It is an accurate tool that is highly precise and the total contributions do not have to be manually calculated.
The calculator automatically takes care of any alterations in the varied interest rates or the contributions ratios over a specific period of time.
This Calculator helps individuals plan their retirement in a way where the percentage of contribution can be increased if retirement is to take place at an earlier age. The EPF Corpus at various periods of retirement can be found out and this results in gaining finances earlier for retirement purposes.
How do EPF Calculators work?
To use the calculator, the input values need to be entered to generate the result.
The steps that are necessary to find the output is:
- The basic salary needs to be entered along with the age of the individual. The dearness allowance is allowed up to a maximum limit of INR 15000.
- The employer’s contribution which can be found out by adding earnings per share (EPS) and the EPF, the total interest that is earned along with the maturity amount will come up in the results after the inputting the values. The minimum percentage of contribution to the employee Provident Fund is 12%.
- The age of retirement can be filled and it is up to a maximum of 58 years.
- The current interest rate has to be entered and this is the final step.
Q1. Why should an EPF Calculator be used?
Ans: It is simple, easy to handle and the accumulated retirement corpus can be viewed in the EPF account in a very short duration of time. It helps with the decision making process after retirement.
Q2. What is the interest rate that the calculator uses in order to calculate the retirement corpus?
Ans: The current interest rates that have been set up by the EPFO for the financial years are utilized to calculate the result.
Q3. Do I need to pay to use the EPF Calculator?
Ans: The EPF Calculator is absolutely free for all individuals to use.
Q4. Is the EPF Calculator helpful when it comes to monitoring the EPF returns?
Ans: At the age of retirement, the funds that have been saved up in your EPF account are shown. The contributions can be increased to get a higher amount when the individual is about to retire.
Q5. When can money be withdrawn from an EPF account?
Ans: This can be done only after completing 7 years of service or thrice during the account’s duration for personal purposes. More than 50% of your personal contribution cannot be withdrawn.
Q6. Are high rates of interest offered by the EPF?
Ans: The current rate of interest offered by EPF is 8.5% and overall, compared to other fixed income instruments, it has one of the highest interest rates.