EPF interest rate:
Will you lose higher interest on EPF if you don't transfer your EPF account from old to new employer?
May 5, 2025
Synopsis
Indian salaried individuals should transfer their EPF accounts upon changing jobs to continue earning interest. Neglecting this transfer can lead to loss of potential gains, especially with the current EPF interest rate at 8.25%.
The Employees' Provident Fund (EPF) is one of the most trusted retirement savings instruments for salaried employees in India. The EPF offers tax breaks and a competitive interest rate on the savings. However, if you've changed employment and haven't transferred your previous EPF account to your new company, you may be wondering whether you'll still receive interest on the old EPF account or if you will miss out on better returns.
What happens when you don't transfer your EPF Account?
When you switch jobs, usually your EPF account doesn't automatically transfer to your new employer's records. Instead, the employee is required to initiate the transfer process through the EPFO Member Sewa portal. Until then, the money in the previous EPF account remains there, although your Universal Account Number (UAN) stays the same.
However, many employees delay or neglect this step-either out of oversight or due to the misconception that funds in the old EPF account will continue to earn interest.
Does the EPF continue to earn interest if you don't transfer?
Yes, but with a time limit. According to EPFO rules, interest is credited on dormant (inoperative) EPF accounts for up to 36 months (3 years) from the last EPF contribution. If no contribution is made to the account for 36 months and the employee is no longer working (i.e., has retired or left employment), the account becomes inoperative, and interest stops accruing.
So, if you have not transferred your EPF account after switching jobs, the old account will continue to earn interest only for three years from your last contribution. After that, it stops earning, and you effectively lose out on potential gains-especially given EPF's relatively high interest rate (currently 8.25% for FY 2024-25 as approved by the EPFO).
Why you could be losing out on higher interest
Suppose you didn't transfer your previous EPF account when you changed employment in 2020. If you didn't do anything, that EPF account would have stopped earning interest by 2023. Your previous balance is essentially sitting inactive while your new employer has been contributing to a fresh EPF account, making you earn interest on the lower balance.
In addition to losing compounding of interest, this can make withdrawals more difficult, particularly if the previous EPF account did not comply with KYC or did not have current bank or Aadhaar information.
Seed your bank account with UAN to get easy PF withdrawal, seamless transfer: EPFO
Things to know about transferring EPF account
To ensure you continue to earn the maximum EPF interest and maintain a consolidated retirement corpus:
Using the EPFO Member Portal, transfer your EPF account right away when you move jobs.
o Verify that your bank account, Aadhaar, and PAN are up to date, and that your UAN is activated.
o Keep a close eye on your passbook to keep tabs on interest accrual and contributions.
o To take advantage of long-term compounding, do not take an early withdrawal from your EPF unless absolutely required.
Important FAQs on EPF account transfer
My PF amount got transferred from my previous MID to my present MID. However, my Pension amount has not been transferred. What to do?
Ans. The pensionary benefits are dependent on the length of service and the average of last wages drawn. It does not depend on the actual amount lying in the Pension Fund Account. Hence this amount is not transferred during change of employment and a mere transfer of past service history makes the member eligible for pension related benefits.
I want to file a PF transfer claim but I do not know if my past employer was exempted or un-exempted. How can I find out?
Ans. The EPF member can view the status of any establishment by going to the PF establishment search. The member must go to https://www.epfindia.gov.in. Thereafter, go to Our Services> For Employers > Establishment Search (Under head Services). Then, the details of the establishment (name or PF Code) can be entered to view the status of the establishment.
I used to work in an exempted establishment. Now I work in an unexempted establishment. How can I file transfer claim?
Ans. Employee is required to submit PF Transfer Claim to the Exempted Trust which will enter the transfer details as Annexure K in Unified Portal. The employer will make the online payment against the Annexure K. After due approval by PF office the past amount and service history gets reflected in his current MID passbook.
How to track the status of online transfer claim?
Ans. The Member e-SEWA portal allows the member to track the status of the transfer claim submitted by going to 'Online Services' tab and then to 'Track Claim Status'. Once the claim is submitted the status shown is "Pending with the employer". If the employer approves transfer request, status of the form changes to - "Accepted by the employer. Pending at Field Office".
[The Economic Times]
