The Employees’ Provident Fund Association is also one of the most utilized retirement savings schemes in India that offers salaried personnel financial security by way of post-retirement life. Employees and employers contribute towards this scheme regularly, which grows year after year through monthly contributions and the compounding of interest. The EPF passbook maintains an open record of these deposits, making it easy for the employees to monitor the amounts and prepare for the future. The article discusses how the passbook operates, its attributes, and why it matters when it comes to effectively managing your employee provident fund account.
What is an employee provident fund (EPF)?
The provident fund of the employee is a state-mandated retirement system run by the Employees’ Provident Fund Organisation (EPFO). In this system:
- Employees pay 12% of their dearness allowance and basic wages every month.
- Employees pay equally, of which 8.33% is paid to the Employees’ Pension Scheme (EPS) and 3.67% to the EPF account.
- The EPFO announces interest every year, which is added to the member account.
- The corpus thus garnered is payable on retirement, resignation, or on onset of specified conditions such as illness, death, or permanent disability.
The EPF promotes systematic savings to the advantage of the employee in terms of long-term accumulation of wealth with relatively low risk.
What is an EPF passbook?
The EPF passbook is an electronic record and gives a clear, month-to-month breakdown of:
- Employee’s monthly contributions.
- Employer’s monthly contributions.
- Interest credited on the balance.
Transfers and withdrawals, if any.
It is similar to a bank passbook, offering absolute transparency to the employee’s provident fund account.
How to view your EPF passbook
Employees can view and download their EPF passbook online by following the below steps:
- Log on to EPFO Member Passbook Portal.
- Enter your Universal Account Number (UAN) and password.
- Choose corresponding PF account number.
- Check or download the selected financial year’s passbook.
Passbook is revalidated from time to time, and members can view their latest contribution and interest accrual.
Key details included in EPF passbook
- Opening balance: Closing balance brought forward from last year.
- Employee contributions: Monthly employee contributions.
- Employer contributions: Monthly employer contributions.
- EPS contribution: Employer contribution to pension fund.
- Interest credited: Interest accrued over balance brought forward.
- Closing balance: Total amount available at period-end.
This transparency enables members to confirm timely employer contributions and plan their retirement finance with precision.
Why contribution tracking via EPF passbook matters
- Confirmation of deposits: Ensures evidence of employer’s timely payments of contributions.
- Interest credit monitoring: Ensures evidence that the interest credited annually has been done so accurately.
- Identification of delays or mistakes: Any discrepancy in contribution or skipped deposits is easily identifiable.
- Retirement planning: Members are able to calculate their corpus at retirement.
- Confirmation of transfers: Ensures hassle-free transfer of funds in the event of a change of employers.
Irregular checking informs employees of their financial security and arranges any issue to be resolved on time.
Illustration of how EPF builds up over time
Suppose:
Basic salary every month: Rs. 40,000
Employee contribution: 12% of Rs. 40,000 = Rs. 4,800
Employer contribution to EPF: 3.67% of Rs. 40,000 = Rs. 1,468
Total monthly EPF contribution: Rs. 4,800 + Rs. 1,468 = Rs. 6,268
EPF rate of interest: 8% p.a.
After 15 years:
Total contribution: Rs. 6,268 × 12 × 15 = Rs. 11,28,240
Approximate interest earned: Rs. 7,80,000
Total EPF balance: Rs. 11,28,240 + Rs. 7,80,000 ≈ Rs. 19,08,240
The EPF passbook would show such monthly deposits, interest accrual, and the ultimate amount in due course of time.
Advantages of online EPF passbook access
- 24×7 access from anywhere.
- Current updation on employer deposits.
- Instant verification during withdrawal or transfer claim processing.
- Ease of documentation for home loan or investment planning.
- PDF downloadable facility for maintenance of personal documents.
Online availability has done away with the time lag involved in collecting statement through physical mode.
Disadvantages of EPF passbook
- Passbook updation can be time lagged after contributions.
- Entries prior to UAN activation can be partially concealed.
- Grievances or discrepancies still necessitate employer authentication or EPFO assistance.
Despite the limited constraints, the passbook continues to be an important monitoring tool.
Safety of deposits of employee provident fund
- The EPF is Government of India fully guaranteed.
- Contributions are secured against market risk.
- Money earns interest as declared by the government, with fixed returns.
- Withdrawals are allowed under specified conditions which allow for systematic savings.
The EPF continues to be one of the safest long-term savings instrument for salaried employees.
Conclusion
The EPF passbook is an easy and trustworthy document allowing workers to monitor employer as well as employee contributions to the employee provident fund account. For example, an individual earning Rs. 6,268 per month can have approximately Rs. 19,08,240, taking into account compounded interest, after 15 years. Regular review with the help of the passbook facilitates timely contribution, interest credits, and proper retirement planning. Since access is available at the click of a button, the EPF passbook has become a compulsory financial document that allows workers to manage their long-term savings with greater confidence and clarity.
Disclaimer: The information in the article is general in nature. Individuals should thoroughly study all the benefits, pitfalls and risks involved prior to participating or investing in the Indian financial market.