How to invest your EPF fund smartly?

EPF fund

Employee Provident Fund is a scheme that caters to the financial need of working professionals in a private or government firm. As part of the scheme, a small portion of their income is deposited every month for which an equal portion is contributed by the employer as well. Individuals attaining the age of 60 or those who aren’t working anymore can do PF account balance check and apply to withdraw the entire amount. 

Since the provident fund amount is substantial as an investment is made for the entire period of employment, the amount withdrawn can’t be left in a savings account. Instead, customers should look for prospective investment options that cater to their need by providing higher and assured returns.

Where to invest EPF funds? 

  • Senior Citizen Savings Scheme 

Most users perform PF account balance check and withdraw the amount after attaining retirement age. If that’s the case, users can choose to opt for a senior citizen savings scheme. Customers can invest in SCSS from a post office or any financial institution for 5 years. The lock-in period can be further extended to 3 years. For the financial year 2019-2020, the interest rates stood at 8.6%. 

  • Fixed deposits 

Users can invest money without any hassles in a fixed deposit and expect assured returns along with higher interest pay-out. NBFCs like Bajaj Finance offer such investment instrument that assures higher return to help customers save and plan their finances better. 

Moreover, individuals can make use of an FD calculator as offered by the financial institutions to compute the maturity amount and interest pay-out. For calculation, they need to input the value of deposit amount, interest rate, and tenor of deposit. 

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Further, customers have the option to reinvest in such deposits if they opt for auto-renewal. Customers can check multiple options available in the market and choose the best FD rates to ensure higher returns. However, interest rates shouldn’t be the only factor of consideration as investors need to make sure they are choosing a trusted and secure financial company. 

Most individuals prefer investing the EPF amount in a fixed deposit as these are free from market risk. Also, any change in the interest rate afterwards doesn’t have any impact over the term deposit already made and its return. 

It is easy to liquidate fixed deposits at times of emergency with the option for premature withdrawal. However, premature withdrawal of fixed deposit is not financially advisable as it affects the overall return and may cause other penalties. 

  • Mutual funds 

Investing in mutual funds is another preferable option of investing EPF fund since they can generate substantial returns through the course of investment. However, investors must consider their financial goals and risk appetite before investing in a particular kind of mutual fund.  

  • Real estate 

Investing in real estate is considered as one of the best investment options in India because of the prospective growth aspects. Nonetheless, individuals must look for properties that have better growth prospects in future. 

Besides, liquidating real estate assets is easier if the property is in a developed area with all basic amenities. Customers should always research before investment and ensure not to invest in any properties with disputes. 

  • Gold 

Once customers do PF account balance check and withdraw the amount, they often check for feasible investment options which can generate higher returns while ensuring security. In this aspect, investing in gold has been the conventional approach. Considering the rising price of gold jewellery and its consistent demand, this industry is unlikely to witness a downfall. Consequently, investing in gold jewellery can be one beneficial approach. 

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Subsequently, the investment options mentioned above are some of the secure ones that customers can choose to receive high returns. As senior citizens rely on their hard-earned EPF funds after retirement, it should be invested wisely to make the most of it.

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