Many of us have the confusion of what is inoperative EPF accounts and how long the EPFO will credit the interest rate. For this, EPFO comes out with clarification about interest on inoperative EPF accounts. Let us see the rule.
What is the meaning of Inoperative EPF Account?
Before jumping into the recent changes, let us first understand what is the meaning of Inoperative EPF Account. I will try to explain the same through below image.
You might have now got the clarity that your account will turn to be INACTIVE once you attain the age of 58 years. As per EPFO rules, the retirement age is 55 years. If you do not withdraw the money within 3 years from the attainment of the age of 55 years, then such accounts are called as INACTIVE EPF ACCOUNTS.
Interest on Inoperative EPF Accounts up to 58 years of age
Now as per the clarification from Ministry of Labour, your account will fetch the regular interest up to the age of 58 years. Whether you contribute to it or keep it idle, EPFO will credit to such accounts as long as you turn 58 years of age.
Here is the press report of the same.
This new rule will be applicable from 11th November 2016.
Is it wise to keep inoperative EPF accounts idle for so long?
Yes, this doubt is there in many employees mind. But with the advent of the internet and all data available on in EPFO portals, I don’t think there is any harm in keeping idle accounts for so long.
However, make sure that your fully KYC complied and you have an access to online EPFO portals. This makes sure that you can view the balance frequently. Also, it will ease your life when you try to withdraw it.
If you found anything unusual with your account, then you can raise the issue immediately with EPFO using EPFO Grievance Cell online.