Ahead of Diwali, the government raised interest rates on General Provident Fund (GPF) and other related schemes by 0.4 per cent to 8 per cent. The revised rates would be applicable from October 1, 2018 to December 31, 2018, Department of Economic Affairs' said in a statement. This means that GPF will fetch higher interest rates for the quarter ending December as compared to the existing rates. The interest rate would apply on provident funds of central government employees, defence forces and Indian railways.
Here are 10 things to know about General Provident Fund (GPF):
1. GPF account is a provident fund account available only for government employees.
2. Interest rates on GPF are revised according to government's notifications issued from time to time.
3. The interest rate on GPF was 7.6 per cent for the July-September quarter of 2018-19.
4. A government employee becomes a member of GPF by contributing a certain percentage of his/her salary to the account.
5. As per GPF, all temporary government servants after a continuous service of one year, all re-employed pensioners (other than those eligible for admission to the contributory provident fund) and all permanent government servants are eligible to subscribe to GPF, as mentioned on pensionersportal.gov.in.
6. A subscriber can subscribe monthly to GPF except during the period when he is under suspension.
7. Subscriptions to the general provident fund are stopped three months prior to the date of superannuation.
8. On retirement of a subscriber, instructions are issued for immediate payment of the final balance on retirement.
9. Under the GPF rules, on the death of a subscriber, the person entitled to receive the amount standing to the credit of the subscriber shall be paid an additional amount equal to the average balance in the account during the three years immediately preceding the death of the subscriber, subject to certain conditions provided in the relevant rule.
10. The conditions for withdrawal from the fund have been liberalized and now no documentary proof is required to be furnished by the subscriber for GPF withdrawal.