Many employees assume that once they leave a job, their Provident Fund (PF) account stops earning interest after three years. That belief, however, is misplaced.
Under the rules of the Employees’ Provident
Fund Organisation (EPFO), a PF account continues to earn interest even long after an employee has exited service, provided the account is linked to a Universal Account Number (UAN). Whether you left your job three years ago or a decade earlier, interest keeps accruing annually until the age of 58 or until the entire corpus is withdrawn.
As per EPFO guidelines, a PF account is classified as “active” for 36 months after an employee leaves a job. Beyond this period, the account is marked “inactive”. Crucially, inactivity does not mean interest stops. Inactive PF accounts are also eligible for interest at the rate declared by EPFO. For the financial year 2024-25, the notified interest rate stands at 8.25%.
There is, however, a tax angle that employees should be mindful of. Interest earned on PF balances after leaving a job is treated as taxable income under “income from other sources”. Tax deduction at source (TDS) is applicable only if the interest earned in a financial year exceeds Rs 50,000.
To avoid complications, EPFO advises members to link all old PF accounts to their existing UAN through the “One Member, One PF Account” facility. This consolidation helps in seamless tracking of balances, ensures uninterrupted interest accrual, and simplifies withdrawals or transfers at a later stage.
PF balances and accrued interest can be checked through the EPFO member portal or the UMANG app.
In effect, PF savings remain secure and continue to grow even years after a job change, so long as the account is linked to a UAN and the details are kept updated.
