The Employees’ Provident Fund (EPF) is meant for long-term savings where the corpus in the account grows steadily over the years through regular contributions and compound interest. Both an employee and their employer contribute to the EPF account of the employee, subject to the applicable EPF rules. For organised sector employees earning up to Rs 15,000 as basic pay, opening an EPF account is mandatory provided their organisation is a member of the Employees’ Provident Fund Organisation (EPFO). For those earning more than Rs 15,000 as basic pay and who joined their service on or after September 1, 2014, the EPF membership is optional.
As the salary of an employee increases during their working years, they can also increase their monthly contribution from the minimum of Rs 1,800. Over a long period, the interest earned on the accumulated EPF balance compounds and adds to the retirement corpus. Through regular EPF contributions for a long term, one can build a retirement corpus of Rs 2.23 crore or higher.
