PF accounts inactive for 36 months or more months no interest | Interest on PF for inactive account cancelled

The decision by the Employee Provident Fund Organisation (EPFO) to stop paying interest on accounts that have not been operated for 36 months or more is expected to cover 60 per cent of the accounts. According to EPFO estimates, there were 30.5 million inoperative accounts across 120 offices. In all, the agency had 47.1 million subscribers at the end of March 2009, which is estimated to have increased during the last financial year. However, latest data on the total number of subscribers was not available.

Many of us will be under the impression that my money will get interest but it is not true if it is idle for morethan 3 years. So better take needed step to claim the same.

While 85 per cent of the inoperative accounts have a balance of less than Rs 5,000, such accounts having less than Rs 1,000 are 51 per cent. The balance in some of these are as low as Rs 1 or Rs 2, but maintaining these accounts cost around Rs 100. EPFO said over 11 per cent of the inoperative accounts had less than Rs 100.

“As long as someone is in employment, the employer pays a 1.1 per cent fee on the amount deducted. But the moment, the deduction stops, the fee also ends, as it cannot be levied on the employee. So, EPFO ends up spending money to keep the account running,” said an official.

Although one option was to levy an annual maintenance charge of Rs 100 on the inoperative accounts, EPFO has decided against it. Instead, yesterday, the Central Board of Trustees decided that from April 1, 2011, EPFO will stop paying interest for inoperative accounts from the 37th month.