EPF or the Employee Provident Fund is perhaps the most multi-dexterous of all available financial products as it serves four functions - 1. Grows wealth, 2. Offers pension, 3. Has in-built insurance and 4. Saves taxes. And all this in addition to giving excellent interest rates of 8.50% at minimal risk.
EPF starts with the employee paying a certain part of his or her salary towards the scheme, which is often matched with an equal contribution from the employer. Then, the combined money is then deposited with the Employee Provident Fund Organisation or EPFO on which you continue to accumulate interest every year.
A few things to remember here:
1. For EPF purposes, salary means your basic salary and your dearness allowance.
2. The present rules require that any organization with 20 or more employees will have to compulsorily register with the EPFO and provide employees with EPF benefits.
3. Additionally, the rules also state that employees whose salary is up to 15,000 rupees a month have to necessarily be part of the EPF program.
