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EPFO Inactive Account: Interest Stop After 3 Years?

Milind Vadjikar |776 Answers |Ask -Follow

Insurance, Stocks, MF, PF Expert - Answered on Sep 22, 2024

Milind Vadjikar is an independent MF distributor registered with Association of Mutual Funds in India (AMFI) and a retirement financial planning advisor registered with Pension Fund Regulatory and Development Authority (PFRDA).
He has a mechanical engineering degree from Government Engineering College, Sambhajinagar, and an MBA in international business from the Symbiosis Institute of Business Management, Pune.
With over 16 years of experience in stock investments, and over six year experience in investment guidance and support, he believes that balanced asset allocation and goal-focused disciplined investing is the key to achieving investor goals.... more

Question by Vishwadeep on Sep 20, 2024Hindi

Hello Sir, In one of your earlier answers, you have mentioned that " As per EPFO rule change as on April 2016, all inoperative accounts will be allowed to receive Interest till 58 years. So you can continue the account and not close the same". I can’t add the URL for the previous answer as Rediff is not allowing to add URLs in the response. The above statement seems to be outdated. As per FAQ page on EPF website - If no contribution is received into a PF account for 3 consecutive years the account shall not earn any interest after 3 years from the stopping of contribution. In the previous answer it was also mentioned that "It is not mandatory to withdraw within 36 months post resignation". But as per EPF website, the account will be inoperative after 3 years if no further PF contributions are made. So, if no further PF contribution after leaving job, it's better to apply for PF withdrawal before the end of the 36-month period from leaving the last job as no interest will be paid after 36 months and the account will become inoperative. Just wanted to bring this to your notice for public awareness. Thanks.

Ans: We always maintained that EPF account becomes inactive after 36 months of continuous non contribution and doesn't draw interest after that so it is advisable for complete withdrawal before the same.
Thanks for the update though!

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Question by Rajan - Jul 26, 2022Hindi

I am 45 years old and resigning from my job to start my own business. I have the following queries: 1. I want to ensure that my EPF account is operative till 58 years old so that I keep getting the high interest that EPF provides. How should this be done? 2. At the same time I want the interest earned yearly to be withdrawn. Can this be done by requesting for partial withdrawal every year in EPFO site? 3. Is it mandatory to fully withdraw within 36 months post resignation in which case the above 2 is not applicable? Request you to clarify as none of the websites clearly states if a partial withdrawal is possible post resignation.

Ans: 1. If there are no contributions made to the PF account for 3 years, the account becomes inactive. As per EPFO rule change as on April 2016, all inoperative accounts will be allowed to receive Interest till 58 years. So you can continue the account and not close the same.

2. Usually, PF doesn’t allow these kinds of withdrawals. You can make withdrawals for house purchase, marriage of self or dependent, education of children etc. Otherwise, year on year withdrawal is not permitted.

3. It is not mandatory to withdraw within 36 months post resignation.

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