Most of the employees are offered an option for the provident fund which creates quite some turmoil within them. Whether to go for it? Or let it go? And even once the decision has been made, they keep second guessing it.
Provident fund is a retirement protection plan offered by employers to their employees. It is deemed mandatory in many countries while offered as a choice in some. It works in a way that a certain percentage of the paycheck each month is deducted and employers add their contribution to this fund and keep it aside for safe keeping. Employees get access to this fund when they retire or get disabled. Other conditions may also exist according to the rules established by the employing company.
However, unlike many other protection plans, a provident fund is one of the most convenient ones. They can benefit the employees in many ways. So if you are having a hard time making up your mind, do consider these positive features first:
- Employee provident fund (EPF) is subject to high-interest earnings.
- One of the unique features offered by the provident fund is the option of partial withdrawal. So, if you are going through a money crisis and need cash to deal with illness, house construction, or any other unforeseen situations then you always have a supply handy.
- This fund not only benefits the employee himself but also allows them to support their family in terms of their needs.
- Provident fund allows the employee to withdraw 50% of their monthly savings 3 times in their life in order to discourage useless spending yet encourage usage at times of absolute need.
- This system is so elaborate and flexible that it saves the employees from going towards other programs to fund them in times of health or other emergencies. No more need for insurances when you have this option.
- In case the employee dies, all of the provident fund goes to the family he/she is leaving behind. This provides a feeling of safety and satisfaction for the employees that they won’t be leaving their families empty handed, especially those who are the bread earners of the house.
- When an employee agrees on provident fund, he automatically signs up for the Employee Deposit Linked Insurance schemes. This saves the employee from making any extra payment besides the provident fund yet get access to an insurance fund which can go as high as 6 hundred thousand.
In many countries provident funds are mandatory for employees while in others it is offered as an option. Regardless, every employee must go for the provident fund because there are no other retirement protection plans that offer better features. With provident fund, you not only can take care of yourself in old age, but could also take care of your family even after death and have your insurance covered too. Apart from all that, if any emergency appears out of the blue, provident fund is there to help.