Provident fund is the amount that you receive at the time of your retirement. If you are curious to know how much you will receive, you can use the provident fund calculator. There are many of them available online that will help you to calculate the exact amount. Here are some details that will be of help.
What is PF?
Provident Fund is a retirement saving scheme which is managed by the government. Employees deposit every month some amount of their salary for their pension fund. Employees can withdraw all savings after retirement.
How to calculate PF amount?
The employer and the employees both contribute to the PF account. The account name of PF contribution should be the employee’s name. The employer contribution according to the EPF contribution rate 2019-20 is 12% of basic wage plus DA(Dearness Allowance) and the employee also contributes equally. But for those organizations in which less than 20 employees work should follow the guidelines of EPFO. In these companies both the employer and the employee contribute a minimum 10% PF percentage. Employees who work in the private sector, their contribution depends on their basic salary. For example, if your salary is 40,000 then both employers and you will contribute 4,800 Rs/- each. You can also use an online EPF calculator.
How can you invest your EPF savings?
Invest in mutual funds and shares
You can invest your EPF savings in market linked securities such as mutual funds and shares. They offer the high interest rate so you can gain a big amount within a short time period. They totally depend on the market so you need to monitor closely because markets fluctuate constantly. The function of mutual funds and share market is regulated by SEBI. So, you can prefer investment purpose.
Invest in real estate
Real estate is one of the best options for you that offer high returns. You can purchase commercial or residential properties for rent and ensure your monthly salary. You can also buy a property and over time you can sell it that can give returns two or three times of your investment.