EPFO has set an interest rate of 8.25% on EPF accounts for the financial year 2024-25. However, if an account remains inactive for 36 months, it will not earn any interest. Members are advised to transfer their old accounts to new ones or withdraw the funds. The EPFO 3.0 digital platform is set to launch soon.
EPFO Interest Update: EPFO has decided on an annual interest rate of 8.25% for EPF for the financial year 2024-25, which will be credited to the account once a year. However, if an EPF account remains inactive for a continuous period of 36 months, it will not earn any interest. For this reason, EPFO has advised members to transfer old accounts to new EPF accounts or withdraw the funds. An account remains active for only three years after retirement. Additionally, EPFO will soon launch the EPFO 3.0 digital platform, which will expedite claim processing and digital services.
What is an Inactive EPF Account?
According to EPFO, an account is considered inactive when there has been no financial activity in it for three consecutive years. This includes deposit and withdrawal transactions, while interest credits are excluded from being considered as activity for deeming an account inactive. Notably, an EPF account remains active for only three years after retirement. This means if a member retires at the age of 55, their account will earn interest only until they reach the age of 58. After this, the account will become inactive, and interest will cease to be credited.
Measures to Avoid Inactive Accounts
EPFO has stated on its official social media channels that if your old EPF account has been inactive for more than 36 months, it will become inoperative. To avoid this situation, working members should transfer their old EPF accounts to new EPF accounts. Meanwhile, those who are currently not working should initiate the process of withdrawing their EPF funds. This will not only keep the account active but also prevent the loss of interest.
EPF Transfer Process
Transferring an old EPF account to a new one is straightforward. This can be done using the official EPFO website or mobile application. Once the transfer process is initiated, the funds will be directly transferred to your new account, ensuring the continuity of account activity. The primary objective of this process is to prevent the old account from becoming inactive.
EPFO 3.0: A New Digital Platform
EPFO is soon going to launch its digital platform, EPFO 3.0. It was initially scheduled for launch in June 2025 but faced delays due to technical reasons. The new system aims to speed up claim processing and provide members with facilities such as direct EPF withdrawals via UPI. EPFO has shortlisted three major IT companies, including Infosys, TCS, and Wipro, for this project. These companies will assist in the operation and maintenance of EPFO 3.0.
Grow Your Future Savings with EPF Funds
EPF funds are a secure investment avenue and provide financial security after retirement. Therefore, not only is there a risk of losing interest when an account becomes inactive, but the overall fund can also be affected in the long run. As per EPFO rules, timely transfer or withdrawal of funds is beneficial for members.
