6 min read
Updated on Sep 13, 2023
Securing one’s family financially to tackle any unforeseen future events is important. So, to secure your own future as well as the future of your dependents, you must save enough in various saving instruments. However, before doing so, you should get details about such saving tools so that you can gain better benefits out of them. You must note that different plans of savings function in different ways and benefit differently. Thus, you need to be very careful while choosing between the best fund to invest on for securing your future.
One such best option is the voluntary provident fund or VPF, which is considered to be a wise investment to accomplish future goals. This plan is safe and allows high protection from unforeseen issues. Let us understand the term in detail.
It is the voluntary contribution made by an employee towards his/her Provident Fund (PF) account. This contribution is done in addition to the minimum amount of payment fixed by the EPFO or Employees’ Provident Fund Organization. So, the account holder can make the VPF contribution as an additional security to accumulate savings.
Since Voluntary provident fund or VPF is an addition to the EPF or Employees’ Provident Fund, it allows the employee to add as much as they want to their PF account. The voluntary provident fund scheme is supervised by the government of India. However, 12% of the money is contributed towards the EPF account.
The VPF is a beneficial tool to save money, evaluating the interest rate of the fund before starting a plan is still advisable. The VPF also allows the policyholder to focus on your future monetary planning to help you gain further advantages.
Below are some of the best and most attractive features of VPF:
Let’s check the key benefits of VPF as stated below:
VPF is a division of the EPF or Employee provident fund. Hence, a VPF account is easy to open. You just need to request the concerned finance or HR team of your company.
However, to be able to open a VPF account as an employee, it is important that your employer or the company is registered with the Employee Provident Fund office. Also, the employee has to submit a VPF application form to the employer whom you are working with and submit the necessary KYC documents as well.
The VPF interest rates are attributed to your EPF account towards the end of a fiscal year. The rate of interest in this case is calculated as per the balance available at the start of a month. This balance includes the contribution done by the employee, employer and the VPF amount.
By using an online tool of VPF calculator, one can calculate the interest rates of your VPF account. With this calculator, you can calculate the accumulated amount of EPF that you will receive after retirement as well as can calculate the lump sum payout (including both employee and employer contribution). Further, you can also know the accrued interest on the Voluntary Provident Fund by submitting the required details in the calculator.
Below are the documents needed for VPF withdrawal:
It is important to know the rules and regulations of the VPF in detail if you are willing to open an account:
To Sum Up
Knowing all about the voluntary provident fund contribution is important before opening an VPF account. This supports individuals with a lot of future plans and eases financial worries. Further, VPF makes it easy for withdrawing or transferring the amount to give you a hassle-free experience.
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