Introduction
Employees Provident Fund (EPF) is a retirement savings scheme that is managed by the Employees Provident Fund Organisation (EPFO). It is a mandatory contribution made by both the employer and the employee towards the employee’s retirement savings. The EPF is a long-term investment and the money is invested in various instruments such as government securities, bonds, mutual funds, and other approved securities. In this article, we will discuss where does EPF invest our money and how it is managed.
Where Does EPF Invest Our Money
?
The Employees’ Provident Fund (EPF) invests the money of its members in a variety of instruments, including government securities, bonds, equities, money market instruments, and other approved investments. The EPF also invests in real estate, infrastructure, and other approved investments. The EPF also invests in Sukuk, which are Islamic bonds.
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Employee Provident Fund Organization (EPFO) invests the contributions of employees and employers in Exchange Traded Funds like Nifty 50, Sensex, Central Public Sector Enterprises (companies in which the direct holdings of central govt are 51% or above), and Bharat 22 indices. In order to avoid the risk of investment, EPFO doesn’t invest in equities of individual companies.
EPFO pays interest to the provident fund accumulations of the employees from the interests earned from these ETF investments. The present EPF interest rate for the financial year 2019-20 is 8.65%.
By September 2019, EPFO invested 86,966 Crores of rupees in the above mentioned ETFs. Hence the total amount of EPF is investing in ETFs the risk of losing money is very low and the returns will be steady.
EPF is the best social security scheme for the employees, because here along with the 12% contribution of employees on their basic wage they will also get another 12% contribution of the employer (3.67% in PF and 8.33% in pension).
I would like to give one suggestion here, if you are contributing to EPF then don’t withdraw your EPF amount unnecessarily when you shift jobs. Because when you withdraw it then you will miss the compounding benefit of your EPF investments. So it is better to keep your money in EPF account until you retire.
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Where Does EPF Invest Our Money?
The Employees’ Provident Fund (EPF) is a retirement savings scheme managed by the Employees’ Provident Fund Organisation (EPFO). It is a social security organisation that provides financial security to employees in India. The EPF is funded by contributions from both the employer and the employee. The EPF is one of the most popular retirement savings schemes in India and is used by millions of people.
The EPF invests the money collected from employers and employees in various instruments such as government securities, bonds, mutual funds, and other approved securities. The EPF also invests in infrastructure projects, housing projects, and other approved projects. The EPF also invests in stocks and shares of companies listed on the stock exchanges.
The EPF invests the money collected from employers and employees in a diversified portfolio of assets. This helps to reduce the risk of losses due to market fluctuations. The EPF also invests in government securities, which are considered to be safe investments. The EPF also invests in mutual funds, which are managed by professional fund managers.
The EPF also invests in infrastructure projects, housing projects, and other approved projects. These investments help to create jobs and boost the economy. The EPF also invests in stocks and shares of companies listed on the stock exchanges. This helps to generate returns for the EPF and its members.
The EPF also invests in other approved securities such as gold, real estate, and other commodities. These investments help to diversify the portfolio and reduce the risk of losses due to market fluctuations. The EPF also invests in government securities, which are considered to be safe investments.
The EPF is a secure and reliable retirement savings scheme that helps to provide financial security to employees in India. The EPF invests the money collected from employers and employees in a diversified portfolio of assets to reduce the risk of losses due to market fluctuations. The EPF also invests in infrastructure projects, housing projects, and other approved projects to create jobs and boost the economy.
