Written by : Knowledge Centre Team
2025-09-03
1523 Views
7 minutes read
Share
Initiated by Employee Provident Fund Organization (EPFO), Employees’ Provident Fund (EPF) is a saving scheme that offer retirement benefits to its account holders. You can use it just like any other retirement plan. Both the employee and employer make contributions to the scheme every month in equal proportions. The employee contributes 12%, whereas the employer contributes around 8.43% to the EPF scheme. Basically, EPF is a welfare scheme for the benefit of employees. The interest earned on the investment made in EPF is credited in the PF account of the employees.
Interest Applicable on Employees’ Provident Fund (EPF)
The interest rate of the EPF scheme is reviewed every year. The interest rate of EPF is 8.50% for the financial year of 2020-2021. The EPFO publishes the interest rate for a particular financial year when the year ends. The interest rate is calculated for the month-wise closing balance and after that for the whole year.
- Every year new interest rates are declared. They are valid until the next financial year. Below are some of the essential facts that you know regarding EPF interest rates:
- The prevailing interest rate is valid and applicable only on EPF deposits created between April 2020 and March 2021.
- One month's transferred interest is added up with the next month's balance, and then the interest is calculated on the whole amount, again.
- If no contribution is made to an EPF account for thirty-six months or more, the account gets converted into a dormant or non-operative account.
- However, interest is still provided to the non-operative accounts of employees who have not yet attained retirement age.
- If some amount is deposited in the accounts of retired employees, no interest is offered on such an amount.
- The interest credited to the non-operative accounts is liable for tax according to the member's slab rate.
- The employee receives no interest in the employer's contribution towards the Employees’ Provident Fund; however, pension is furnished from this amount to the employee after 58 years.
What is the Contribution Per Cent of the Employer and Employee in EPF?
An employee’s contribution goes directly into the EPF, while the employer’s contribution goes into the EPF, the EPS and the EDLIS. In an EPF account, both the employee and the employer make equal contributions.
| Contributed by | Percentage contributed - Monthly |
|---|---|
| Employer | 12% |
| Employee | 10% / 12% |
| Total | 24% |
12% of the employer's contribution towards EPF contains 3.67% EPF plus 8.33% EPS. The EPF share of 10% is enough for organizations who have 20 or less than 20 employees. An aggregate of 8.33% contribution is taken from the employer for Employees Pension Scheme; however, only 3.67% of this contribution is made towards the Employees’ Provident Fund. The contribution made by the employee is dedicated solely towards the Employees’ Provident Fund.
Always remember that you must save enough for your retirement and you cannot rely on only an EPF account for that. Explore your options and invest wisely for a secured future.
Check if your retirement corpus will be enough.
How can an Employee Register for an Employees’ Provident Fund?
To register for EPF, follow these 5 quick steps mentioned below-
1. Visit the official website of the Employee Provident Fund Organisation (EPFO).
2. Go to the 'Registration' page; after that, it will take you to the 'Instruction Manual' page. On this page, you will find details for Employee Registration. For the new online submission, you will have to register your digital signature certificate.
3. After that, accept the 'I have read the instruction manual' box to fill up the other details for registration further.
4. After filling up all the details correctly, an email link will be sent to your mail, which you should verify along with a PIN sent to your mobile. Some additional documents are also required to be uploaded for registration purposes.
5. You can skip all this and log in to your account if you've already registered earlier using your Universal Account Number (UAN).
In case you're looking for some other savings cum retirement plan to help you plan a stress-free retirement, Canara HSBC Life Insurance has the perfect option for you! One such retirement plan is Pension 4Life Plan. It offers you retirement benefits along with the option of a savings plan. This plan will safeguard your financial future by helping you build a significant retirement corpus. The plan ensures guaranteed regular income according to your needs after you retire. Some of its benefits are-
- Delivery of a guaranteed steady income
- Limited premium payments
- Additional loyalty benefits
You can opt for a secured retirement plan in the form of an Employees’ Provident Fund or opt for the Pension4Life plan by Canara HSBC Life Insurance. In both ways, you stay ahead in the future and secure yourself from any unforeseen situations. Your future needs better planning, so make sure you are planning for your retirement beforehand.
Disclaimer - This article is issued in the general public interest and meant for general information purposes only. The views expressed in this blog are solely those of the writer and do not necessarily reflect the official policy or position of Canara HSBC Life Insurance Company Limited or any affiliated entity. We make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability, or availability with respect to the blog or the information, products, services, or related graphics contained in the blog for any purpose. Any reliance you place on such information is therefore strictly at your own risk. You should consult with a qualified professional regarding your specific circumstances before taking any action based on the content provided herein.
Recent Blogs
Public Provident Fund (PPF): Account, Features & Tax Benefits
20 Jan '26
1906 Views
10 minute read
Maximize your savings with PPF tax exemption. Discover how investing in a Public Provident Fund secures your future and reduces taxable income.
Read More
Saving Plan
How Can You Ensure a Regular Income for Your Family?
26 Dec '25
3219 Views
7 minute read
Regular income defines your family’s lifestyle and financial status. Know practical ways to create a steady income stream for your family using savings plans, investments, insurance payouts, and disciplined financial planning.
Read More
Saving Plan
NPS for NRIs: How to Save for Retirement from Abroad?
21 Dec '25
1552 Views
10 minute read
Learn how NRIs can invest in NPS to save for retirement and optimize their long-term retirement plans from abroad.
Read More
Saving Plan
13 Factors to Consider Before Buying a Monthly Investment Plan
18 Dec '25
1242 Views
6 minute read
Learn the 13 important factors to consider before buying a monthly investment plan, including returns, safety, payout frequency, flexibility and long-term financial needs.
Read More
Saving Plan
When Is a Guaranteed Savings Plan Useful for Financial Planning?
15 Dec '25
1092 Views
8 minute read
Learn how guaranteed savings plans work, key benefits, ideal situations for use, and how they provide predictable returns and financial security for short- and long-term goals.
Read More
Saving Plan
Our Top-Selling Insurance Plans
We bring you a collection of popular Canara HSBC life insurance plans. Forget the dusty brochures and endless offline visits! Dive into the features of our top-selling online insurance plans and buy the one that meets your goals and requirements. You and your wallet will be thankful in the future as we brighten up your financial future with these plans.
Fixed Returns, Zero Risks & Worries
iSelect Guaranteed Future Plus
- 4 plan options
- Life cover + Guaranteed benefits
- Accidental death benefit
- Premium protection cover
Save, Dream, Plan. Live Peacefully
iSelect Guaranteed Future Plan
- 4 plan options
- Guaranteed Maturity Benefit
- Premium Protection Cover
- Tax Benefits
Popular Searches
- Senior Citizen Saving Scheme
- Post Office Savings Scheme
- What is Sum Assured?
- Money Saving Tips
- Saving Plans for Child
- Endowment Policy
- iSelect Guaranteed Future Plus Plan
- National Savings Certificate
- Tax Saving Plans
- Senior Citizen Savings Scheme Calculator
- NPS and PPF
- Savings & Investment Plans
- Saving Schemes
- Save Money For Salaried Professionals
- One time Investment Plan for Child
- Investment Options for an NRI
- All About PPF
- Sum Assured