EPF Interest Calculator: How large retirement corpus you can build if you invest Rs 5,000, Rs 10,000, and Rs 15,000 monthly in EPF; know calculations
EPF Retirement Corpus: Employees' Provident Fund (EPF) is a retirement scheme for private sector employees, where they invest monthly and get a fixed interest rate on their investments. If they avail the full limit of EPF, not only can it become a good debt investment option, but it can also help them generate a tax-free retirement corpus.
EPF Retirement Planning: Having a secure retirement where one has a corpus that can help them meet daily expenses and achieve other financial goals can be a target for many. There are many government- and private sector-run retirement schemes where individuals can contribute monthly or lump sum to generate a retirement corpus. Employees' Provident Scheme (EPF) is one such scheme run by the finance ministry, where private sector employees can contribute monthly and get a fixed interest to generate a retirement corpus. In this write-up, know more about the EPF scheme and how much retirement corpus one can generate by contributing Rs 5,000, Rs 10,000, and Rs 15,000 a month.
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How one can contribute to EPF
In EPF, an employee earning at least Rs 15,000 in monthly basic salary can contribute. Equal contribution is also from the employer's side.
Minimum and maximum EPF contribution
The minimum monthly contribution from the employee and the employer's side is Rs 1,800, while the maximum is 12 per cent of the basic salary and dearness allowance (DA).
Maximum age for contribution and withdrawal
An employee can contribute up to the age of 60. Withdrawal is allowed only under specific conditions such as 10 years of service and unemployment. However, the retirement age when one can withdraw the entire corpus is 58 years.
Tax benefits of EPF contribution
On EPF deposits, taxpayers following the old tax regime can get up to Rs 1.50 lakh tax benefits in a financial year. The other standout feature of the scheme is that it is among a few investment schemes where the invested amount up to Rs 1.50 lakh in a financial year, the interest earned, and the maturity amount are tax-free.
EPF investment conditions
Here, we will take the example of Rs 5,000, Rs 10,000, and Rs 15,000 investment for 35 years (from 25 years to 60 years) of age.
Retirement corpus after Rs 5,000 monthly investment for 35 years
At Rs 5,000 a month, the invested amount in 35 years will be Rs 21 lakh.
Retirement corpus after Rs 10,000 monthly investment in 35 years
At Rs 10,000 a month, the invested amount in 35 years will be Rs 42 lakh.
Retirement corpus after Rs 10,000 monthly investment in 35 years
The estimated EPF retirement corpus on this investment will be Rs 2,36,67,926.27.
Retirement corpus after Rs 15,000 monthly investment
At Rs 15,000 a month, the invested amount in 35 years will be Rs 63 lakh.
Retirement corpus after Rs 15,000 monthly investment
The estimated EPF retirement corpus on this investment will be Rs 3,55,01,889.4.