Your working years are your most productive years and it is essential to not just think of the immediate future but far ahead when you will stop working. Most people tend to worry about children’s education and marriage as a top priority followed with a home loan or car loan. Saving for oneself – for your health and expenses for longevity are two essential purposes of creating your wealth, but somehow many end up lacking in it. Understanding your needs, lifestyle, income levels, and future medical probabilities should push you to look at your existing funds carefully.
As per mandate by government, every private and public employer is supposed to create a PF account for each employee and pay a contribution towards two segments of the Employee Provident Fund Account – There is a Pension Fund portion to which the employer contributes 8.33% and 3.67% goes to PF Fund. This is the segregation done by Employee State Insurance Corporation(ESIC). Rest 12% of the employee’s Basic salary is contributed to the fund.
Your PF Fund balance is one of the most important investments for creating a retirement fund.
How PF fund helps in future
After a service 35 to 40 years, your PF fund will be a sizeable portion on retirement. Most people will also have a Public Provident Fund as a means to create a corpus for the future. The interest rates currently are not very different from each other. However, the difference lies in the fact that EPF is a defined contribution benefit. The amount of deduction is fixed each month, and you or the employer cannot stop this contribution as it is automatic.
All the other pools of investments are discretionary and done by you at your will. In case you do not have savings for other investments, then it might not happen, or the amount might not be fixed each month or period. Thus, the importance of EPF here increases as it helps create a habit of saving for the future. It is a corpus which you will have until you retire and withdraw.
Benefits of staying updated with PF balance
As an employee who has multiple responsibilities at home financially, you can keep track of this amount and be conscious of the corpus being created. This will help in the following ways –
- Give you an idea of further investments you need to make for retirement or other goals.
- Seek out the returns on EPF and other investments and compare them.
- Reshuffle your portfolio if the EPF amount will be substantial and you can avoid investing more amount in any other superannuation fund.
- Instead, you can redirect that money to other lucrative investments like company FDs which will earn more interest rates than a bank FD or even the EPF.
- Plan ahead and see where to invest this amount once you receive it.
Lucrative investment alternatives
A PF balance can be checked, consolidated, and withdrawn using the EPFO portal. You can look at highly ranked company FDs such as Bajaj Finance FDs. It is ranked well with FAAA/Stable rating from CRISIL and MAAA/Stable rating from ICRA. This means the returns are guaranteed as these ratings signify good repayment history and liquidity.
Choose from various FD interest rates as per your convenient tenor. Bajaj Finance FD provides great benefits such as online account management, periodic interest payouts, loan against FD, multi-deposit facility, premature withdrawal, debit card for investment, and online Fixed Deposit calculator.
Choosing a good tenor post-retirement with a cumulative option will reap you higher returns which you can use to grow your portfolio. You can also look for a monthly, quarterly, or bi-annual payout to receive money for medical expenses or leisure. Make your post-retirement life a breeze with Bajaj Finance FDs.