PF withdrawal rules you should know

Provident fund is a great investment instrument for retirement, but it comes with a list of withdrawal rules.

The Employees’ Provident Fund (EPF) is an investment fund built using the contributions from the employee, the employer and, sometimes, the government during a person’s employment period. This fund provides financial assistance after retirement. However, that does not mean you cannot withdraw your PF investments before retirement. EPF also allows you to withdraw your investments in specific scenarios. Let us look at PF and see how to withdraw PF online.

When can you withdraw PF?

PF has a lock-in period until your retirement. But you can withdraw prematurely in case of certain events, such as:

1. Unemployment for two months

EPF rules allow you to withdraw your total investment if you remain unemployed for two months or more. It is applicable in both planned and unplanned unemployment. This provision is to help people who are suffering financially during their unemployment phase. But that does not mean you should withdraw in such a situation. EPF will allow you to keep your funds in the account even if you are unemployed. Hence, it is wiser to keep it untouched unless there is a dire need, especially if unemployment is planned.

2. Medical emergencies

Unlike unemployment, medical emergencies always come unannounced, but your PF fund can be of financial help. EPF rules allow you to withdraw PF in case of medical emergencies. But this is not limited to a medical situation for yourself. Rather, you can utilise a PF fund for medical help for your spouse, parent, or children. In this case, you are eligible for either your share of the PF amount plus interest or six times your monthly salary. You can withdraw the lesser among both.

3. Purchase of a new house

Buying a home is often one of the most significant milestones in anyone’s life, and it can get financially tiring. But your PF fund can help you here as well. You can withdraw the PF amount online for the construction or purchase of a new house if you have completed five years of total employment. You need not spend this period in your latest job rather, your total work period after you joined EPF is considered. Also, you can withdraw up to 90% of your PF balance through this provision. It includes both employee and employer contributions.

How to withdraw PF online 

Once you have figured out your eligibility to withdraw pension contribution in EPF and how much you can withdraw, you can follow the below steps to complete the process:

1. Visit the unified EPF portal at https://unifiedportal-mem.epfindia.gov.in/memberinterface/ and sign in.
2. Go to the ‘Claims’ section in the online services tab.
3. Verify the details and proceed to the online claim.
4. Select the reason for your withdrawal, and on the next page, upload relevant documents providing the reason.
5. Submit the application.
6. The authorities will review your application.
7. The bank will disperse the loan once approved.
   

EPF is meant for your retirement, but often, you might not be able to withdraw it when the need arises. Or the amount you can withdraw might be less than what you require. You could try alternate means in such scenarios. A personal loan from a reputed bank is often a good choice. Banks life IDFC FIRST Bank offers personal loans up to ₹40 lakh with minimal documentation.

Disclaimer

The contents of this article/infographic/picture/video are meant solely for information purposes. The contents are generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. The information is subject to updation, completion, revision, verification and amendment and the same may change materially. The information is not intended for distribution or use by any person in any jurisdiction where such distribution or use would be contrary to law or regulation or would subject IDFC FIRST Bank or its affiliates to any licensing or registration requirements. IDFC FIRST Bank shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information mentioned. Please consult your financial advisor before making any financial decision.