Dear All, I would like to know what is the benefit in contributing the amount to PF? Instead the same amount can be kept in the bank? And also want to know what is the interest would be getting?
From India, Bangalore
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1From India, Bangalore
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Provident Fund Scheme in India
The Provident Fund (PF) is a scheme by the Government of India where a portion of an employee's salary is deducted, and an equal amount is contributed by the employer. This combined amount is kept in a PF account and accumulates monthly. A yearly 9.5% compound interest is paid on this amount. The total amount, along with the interest, is given back to the employee at the time of retirement or resignation. Additionally, the employee can withdraw a non-refundable amount for specific purposes such as children's education or marriage, purchasing immovable property, or seeking treatment for illness.
These facilities are not provided by banks, even though the schemes are different. If you keep the same amount in a bank, the employer's contribution will not be present, and the interest rate is also higher compared to bank interests in PF. For further details, you can search on Google.
From India, Mumbai
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The Provident Fund (PF) is a scheme by the Government of India where a portion of an employee's salary is deducted, and an equal amount is contributed by the employer. This combined amount is kept in a PF account and accumulates monthly. A yearly 9.5% compound interest is paid on this amount. The total amount, along with the interest, is given back to the employee at the time of retirement or resignation. Additionally, the employee can withdraw a non-refundable amount for specific purposes such as children's education or marriage, purchasing immovable property, or seeking treatment for illness.
These facilities are not provided by banks, even though the schemes are different. If you keep the same amount in a bank, the employer's contribution will not be present, and the interest rate is also higher compared to bank interests in PF. For further details, you can search on Google.
From India, Mumbai
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Provident Fund - Excluded Employee - Definition.pdf
What is Employee Provident Fund.docx