Employee Provident Fund is a mandatory requirement for all employees to be provided by their companies. While we usually keep track of the amounts being deducted towards PF contribution from our salaries, we never really pay attention to multiplying this money which adds up to a sizeable corpus.
EPF amounts can become a sizeable corpus and as an investor, you should know how to check your PF balance. There are various methods to do so. To access your PF balance, you can browse through www.epfindia.gov.in and use your account linked with UAN (Universal Account Number). You can also send SMS to 7738299899 with the text EPFOHO UAN ENG (ENG: the language you prefer) or give a missed call on 011-22901406.
Earning Higher Returns on Your PF Balance
PF balance can be withdrawn and invested in various instruments keeping in mind your risk appetite. This way you can earn a higher interest rate while keeping the stability intact. You can look at bank fixed deposits as well as company FDs along with market-linked investments.
You can invest your PF amount and earn more through it in the following ways
Choose from Various Investment Options
You can look at market-linked instruments – stocks, mutual funds, real estate, and also invest some money in fixed income instruments such as bonds, debt mutual funds and fixed deposits.
Though the above-mentioned investments earn high returns over a period of time and provide a cushion against volatility to your hard earned PF money. However, you can achieve stable and steady options with lucrative interest rates with Bajaj Finance Fixed Deposits. These deposits are certified safe by ICRA and CRISIL. Bajaj Finance also offers investors the ease of choosing tenors (from 12 to 60 months) in accordance with their needs with 8.75% fixed rate of return. You can also utilise the FD Interest calculator to know the returns to plan efficient fixed deposit portfolios.
High Interest Rates with Company Fixed Deposits
Bank fixed deposits will earn you interest rates in the range of 5.5% to 7.5% depending upon the tenor. Longer tenors on the lines of 5 years or more will earn you higher interest, but your need for the money might arise much earlier. Alternatively, you can consider an interest rate of up to 9.1% in the current interest rate scenario with companies like Bajaj Finance.
Building a Corpus While Ensuring Liquidity
If you are looking to create a corpus, company fixed deposits will always yield a high interest rate than banks. You can dedicate a fixed amount from your PF corpus (once you are finished with mandatory investments for tax planning) into fixed deposits. In case of a financial emergency, you can go for premature withdrawal of FD or even raise a loan against FD. PPF account doesn’t offer such flexibility to liquidate funds.
Creating a Flexible Strategy with Cumulative and Non-Cumulative Options
You have the flexibility of either going for a cumulative option wherein you can take periodic payouts or a non-cumulative one – where interest will be reinvested each year as an addition to the principal. These combinations can earn you a handsome corpus at maturity with your PF balance.