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<ul><li>The Central Board of Employees' <keyword id="45028" type="General" weightage="20" keywordseo="provident-fund" source="Orion">Provident Fund</keyword> Organisation (<keyword id="6372438" type="General" weightage="80" keywordseo="epfo" source="Orion">EPFO</keyword>) has recommended an 8.15% interest rate to be credited on provident funds for the financial year 2022-23.</li><li>In March 2022, the government declared an 8.1% interest rate for more than its six crore members, which was the lowest since 1977-78.</li><li>The recommendation involves the distribution of more than ₹90,000 crore in the members' account on the total principal amount of about ₹11 lakh crore.</li></ul>The Central Board of Employees' Provident Fund Organisation (EPFO) has recommended an 8.15 per cent interest rate to be credited on provident funds for the financial year 2022-23. In March 2022, the government declared an 8.1 per cent interest rate for more than its six crore members, which was the lowest since 1977-78. The recommended interest rate for 2022-23 would be officially notified in the government gazette after approval of the Ministry of Finance, following which EPFO would credit the rate of interest into its subscribers' accounts. The recommendation involves the distribution of more than Rs 90,000 crore in the members' account on the total principal amount of about Rs 11 lakh crore. In 2021-22, the payment outgo and principal amounts were Rs 77,425 crore and Rs 9.56 lakh crore, respectively. "The total income recommended for being distributed is the highest to date. The growth in income and the principal amount is respectively more than 16 per cent and 15 per cent as compared to the last financial year 2021-22," the Ministry of Labour and Employment said in a release on Tuesday. EPFO is a social security organization responsible for providing social security benefits in the form of Provident, Pension and Insurance Funds to the organized workforce of the country. Separately, the provisional payroll data showed a total of 14.86 lakh net members were added in the month of January 2023. Out of the total members added during the month, around 7.77 lakh new members have come under the ambit of EPFO for the first time. Among the newly joined members, the highest enrolment is registered in the age group of 18-21 years with 2.26 lakh members, followed by the age group of 22-25 years with 2.06 lakh members. The age groups of 18-25 years constitute 55.52 per cent of the total of new members during the month of January. For the month of January 2023, it said 3.54 lakh members have exited the fold of EPFO. This is the lowest exit in the last four months. SEE ALSO: <a href="https://www.businessinsider.in/tech/news/top-chatgpt-4-plugins-from-math-physics-and-language-tutor-to-vacation-planner/articleshow/99036667.cms">Top ChatGPT 4 plugins: From math, physics and language tutor to vacation planner</a> <a href="https://www.businessinsider.in/finance/banks/news/rbis-mpc-could-pause-rate-hikes-in-april-to-gauge-the-impact-of-hikes-so-far-sbi-research/articleshow/99030220.cms">RBI’s MPC could pause rate hikes in April to gauge the impact of hikes so far: SBI Research</a> <a href="https://www.businessinsider.in/business/corporates/news/layoffs-coming-to-the-indian-it-sector-analysts-say-accentures-jobs-cuts-offers-a-blueprint/articleshow/98970175.cms">Layoffs coming to the Indian IT sector? Analysts say Accenture’s jobs cuts offers a ‘blueprint’</a>

Employees' provident fund interest rate fixed at 8.15% for 2022-23

<ul><li>Spooked by rising debt defaults, the Employee Provident Fund Organisation has decided to play it safe. </li><li>Not just to private companies, the pension fund has decided to turn cautious even while buying bonds of government companies. </li><li>EPFO also decided to exercise its early redemption options and cut down exposure to the debt-ridden DHFL. </li><li>The recent crisis in non-banking financial companies, sparked by the collapse of IL&amp;FS, has led to an acute credit crunch in the Indian economy. </li></ul> The credit crunch in the Indian economy is getting more acute by every passing day. The latest to join the list of risk-averse financial institutions, spooked by the spike in unpaid loans, is the country’s pension fund. The Employees Provident Fund Organisation (EPFO) which is managed by the ministry of labour and employment, today made a landmark decision to stay away from lending to private sector companies. It has decided to turn cautious while lending to state-owned companies as well. “The Central Board of Trustees (CBT) approved the decision to withhold any further investment in Private Sector Companies Bonds and to compulsorily consider one of the two required ratings necessarily from CRISIL, CARE, ICRA and India Ratings for investments in public sector undertakings’ bonds category,” said a press release on the discussions held today. This will be a heavy blow to the company as<a href="https://www.business-standard.com/article/companies/nbfc-crisis-epfo-decides-to-halt-investment-in-private-sector-bonds-119062001418_1.html"> it invests as</a> much as 20-45% of its incremental funds in debt instruments. And the assets of the organization that manages the pensions of hundreds of millions of Indians is at massive ₹8 lakh crore. This is another big setback for the market sentiment which is already saddled by a slew of bad news about the economy. Sensex tumbled by 581 points today (August 22). Twice bitten This decision probably came after its exposure to the non-banking financial companies like IL&amp;FS which defaulted on payments. Though it officially never declared how much it is owed to by the scam-ridden IL&amp;FS,<a href="https://economictimes.indiatimes.com/markets/stocks/news/epfo-writes-to-finance-ministry-on-exposure-in-ilfs-bonds/articleshow/68135800.cms?from=mdr"> </a>the exposure is estimated at ₹570 crore, <a href="https://economictimes.indiatimes.com/markets/stocks/news/epfo-writes-to-finance-ministry-on-exposure-in-ilfs-bonds/articleshow/68135800.cms?from=mdr">as per reports citing sources</a>. While the direct exposure to infrastructure lending giant would be just 0.1% of EPFO’s total investments, the decision to abstain from making fresh loans to corporates may be triggered by the wave of defaults triggered by the collapse of IL&amp;FS. EPFO has exposure to yet another shadow bank DHFL, which is one of the many companies that crumbled under the IL&amp;FS debacle. In today’s meeting, the pension fund decided to exercise its early redemption options to cut down exposure to the housing finance company which is saddling heavy debt. In 2015, the government had announced that the pension fund would invest more and make the most of the ‘world’s fastest growing economy’ tag. The Finance Minister Arun Jaitley had then said <a href="https://economictimes.indiatimes.com/news/economy/policy/labour-ministry-to-notify-pattern-of-epfo-investment-in-equity-soon/articleshow/46761238.cms?from=mdr">in the Budget </a>that EPFO would invest 5% of its funds into equity and equity related schemes. However, as things turned for the worse in the last three years, EPFO joined the list of lenders and investors who prefer keeping cash safe in the banks instead of lending to risky companies. The resulting credit crunch further hamstrung an already sluggish economy.

Indian pension fund says it won’t lend money to private companies

Soon, you will be able to withdraw <a href="http://www.businessinsider.in/searchresult.cms?query=provident+fund">PF</a> money online, without running from pillar to post. 
As the <a href="http://www.businessinsider.in/searchresult.cms?query=supreme+court">Supreme Court</a> extended voluntary use of <a href="http://www.businessinsider.in/searchresult.cms?query=aadhar">Aadhaar</a> card to government schemes, the Employees' <keyword id="45028" type="ORGANIZATION" weightage="20" keywordseo="Provident-Fund">Provident Fund</keyword> Organisation (<keyword id="6372438" type="ORGANIZATION" weightage="20" keywordseo="EPFO">EPFO</keyword>) is planning to launch online PF withdrawal facility by March end. 
 
With online facility, PF claims will be settled in three hours of receiving an application. 
 
"We have written to the Labour Ministry for approvals for starting an online PF withdrawal facility. We are hopeful of launching this by March end after yesterday's Supreme Court ruling," said Central Provident Fund Commissioner K K Jalan. 
 
"During this month, we will start settling all PF withdrawal claims having Aadhaar numbers within three days against the mandated period of 20 days though the claims will be filed manually only,” added Jalan. 
 EPFO has also become the registrar of the Unique Identification Authority of India (<keyword id="6355252" type="CITY" weightage="20" keywordseo="UIDAI">UIDAI</keyword>) for purpose of enrolment. 
 
But for the online facility, your Unique (portable PF) Account Numbers (UANs) should be seeded with Aadhaar numbers, including the bank account details. 
 
EPFO website claims that the authority has issued 5.6 crore <a href="http://www.businessinsider.in/searchresult.cms?query=UAN">UANs</a>, out of which 92.88 lakh subscribers have provided their Aadhaar numbers and 2.75 crore bank account details. 
 
EPFO has verified 64.67 lakh Aadhaar numbers and 1.9 crore banks accounts for seeding those with UANs. At present, there are 1.99 crore subscribers who have actually activated their UANs. 
 
(Image: Thinkstock)

PF withdrawal to go online! Settlement will be within 3 hours

Employees Provident Funds Universal Account Number (<keyword id="2407788" type="UNKNOWN" weightage="100" keywordseo="UAN">UAN</keyword>), launched by Prime Minister <keyword id="6354477" type="PERSON" weightage="100" keywordseo="Narendra-Modi">Narendra Modi</keyword> in October last year, has been made mandatory for all employees covered under the Employees Provident Funds and Miscellaneous Provisions Act 1952, by an order notified by Retirement fund body <keyword id="6372438" type="ORGANIZATION" weightage="100" keywordseo="EPFO">EPFO</keyword> on Monday. The step was taken for availing of benefit of the scheme. "We have notified the draft order to make UAN compulsory for all organisations covered under the EPF &amp; MP Act," EPFO's <keyword id="6567698" type="ORGANIZATION" weightage="40" keywordseo="Central-Provident-Fund">Central Provident Fund</keyword> Commissioner K K Jalan told PTI. 

	The UAN remains portable throughout the lifetime of an employee and they don't have to apply for PF transfer claims at changing jobs. 
 

	It is even more beneficial for workers in the construction sector, who often change their contractor after short span of time and take up new jobs after fining one contract. 
 
 

	"The deadline for completing the formalities is August 25 after which action will be taken under the powers given to us by the Employees Provident Funds Scheme, 1952, and other applicable laws for failure to comply with the order," Jalan had said after meeting around 150 employers in Bengaluru last week as per media reports. 
 
 The Employees' <keyword id="122254" type="ORGANIZATION" weightage="60" keywordseo="Provident-Fund-Organisation">Provident Fund Organisation</keyword> (EPFO) had issued over four crore UANs to employers across the country in July last year. 

	These UANs were then provided to workers and the process of seeding these accounts with KYC details like PAN, Bank Account and Aadhaar started. 
 

	As on today, as many as 56.34 lakh workers have activated their portable PF account numbers. All subscribers have to activate their UAN themselves by logging into the account. 
 

	After the due process, as many as 2.8 crore UANs are ready for activation but these many account holders have not provided their bank account details as per the EPFO website. 
 

	According to information available, there are additional 1.71 crore UANs which were made ready for activation by subscribers who had provided banks accounts details. 
 

	The bank account details are necessary for using UAN for various claims including PF withdrawals. However, those subscribers who have UAN but not provided bank account details can activate their UAN and access it online.

	 
	 
	(image credits: goodreturns)

UAN mandatory to avail benefit of the scheme

Relief for those who wanted to draw out their premature <keyword id="45028" type="ORGANIZATION" weightage="80" keywordseo="Provident-Fund">provident fund</keyword> (PF) withdrawals of Rs 30,000 or more as the <keyword id="47209" type="ORGANIZATION" weightage="80" keywordseo="Finance-Ministry">finance ministry</keyword> is reconsidering its Budget provision to tax such withdrawals, even as the 2015 Finance Act has been notified and deduction of tax at source from PF accounts settled before five years of service, comes into force from June 1. 
 

	The finance ministry might issue a directive to put the implementation of this clause in the Finance Act on hold or raise the Rs 30,000 trigger for tax deductions from PF accounts, a senior official said. "The government is mulling two options to hold back the implementation of this tax, after the PF office pointed out that it would be unfair to tax retirement <keyword id="25450" type="UNKNOWN" weightage="60" keywordseo="savings">savings</keyword> of people whose income is less than the personal <keyword id="6354751" type="COMPANY" weightage="80" keywordseo="Income-Tax">income tax</keyword> threshold of Rs 2.5 lakh," the senior official told the Economic Times. 
	 

	Meanwhile, the PF department has ordered all offices to be ready to deduct tax from all premature PF claims settled from June 1 as the decision is expected by the end of this month. 
	 

	"Tax will be deducted at 10% if members submit their PAN card details and at the maximum marginal tax rate of 34.608% if a member fails to submit PAN. Only in cases where a member submits Form 15G or 15H, no tax will be deducted," the official said. 
	 

	Form 15G is a self-declaration document for individuals having non-taxable income, while Form 15H is a similar declaration by senior citizens (over the age of 60 years). However, these forms won't be accepted as a valid defense for avoiding tax deductions in case of PF accounts with balances of Rs 2.5 lakh (for those with no taxable income) and Rs 3 lakh for retirees. According to the Employees' <keyword id="122254" type="ORGANIZATION" weightage="80" keywordseo="Provident-Fund-Organisation">Provident Fund Organisation</keyword> (<keyword id="6372438" type="ORGANIZATION" weightage="80" keywordseo="EPFO">EPFO</keyword>), no tax will be deducted if the PF savings are transferred to another PF account. 
	 

	Moreover, no tax would be deducted on their PF withdrawals in special cases. If an employee had to leave service due to bad health or other factors beyond their control such as a slowdown or shutting down of the employer's business, no tax will be deducted. 
	 

	Personal income tax is payable for those earning Rs 2.5 lakh or more annually. An EPF account is mandatory for all employees earning up to Rs 15,000 per month in companies having over 20 workers. As per the law, 24% of an employee's salary is diverted to her or his PF account. 
	 
	(Image: Indiatimes)

Relax! The govt won't tax you just yet for withdrawing your PF before 5 yrs

The labour ministry has implemented retirement fund body <keyword id="6372438" type="ORGANIZATION" weightage="20" keywordseo="epfo">EPFO</keyword>'s <keyword id="68581" type="PERSON" weightage="20" keywordseo="Decision">decision</keyword> to restore pension commutation under the Employees' Pension Scheme, a move that will benefit 6.3 lakh pensioners. Pension commutation refers to part-withdrawal of fund in advance by a subscriber, who then gets reduced pension amount for 15 years. With the ministry's latest decision, such pensioners would receive their full pension after completion of 15 years. On February 20, the ministry notified the decision of the <keyword id="351142" type="COMPANY" weightage="20" keywordseo="Employees-Provident-Fund-Organisation">Employees' Provident Fund Organisation</keyword> (EPFO) to restore pension of those who opted for commutation of their pension on or before September 25, 2008. In this regard, the Employees' Pension Scheme -- run by the EPFO -- has been amended. "The normal pension in respect of those members who availed the benefit of commutation of pension under the erstwhile paragraph 12A of this scheme, on or before the 25th day of September, 2008, shall be restored after completion of fifteen years from the date of such commutation," as per the notification. As many as 6.3 lakh pensioners would benefit from the decision. They had opted for commutation of their pension and got a lump sum at the time of retirement from their pension fund on or before September 25, 2008. The provision for pension commutation of pension was withdrawn by the EPFO. Now, the facility has been restored for all those who opted for it on or before September 25, 2008. Under the commutation, monthly pension used to be cut by one-third for the next 15 years and the reduced amount was given in lump sum. After 15 years, pensioners were entitled to get the full pension. In August 2019, the EPFO's apex decision-making body -- <keyword id="5190387" type="COMPANY" weightage="20" keywordseo="Central-Board-of">Central Board of</keyword> Trustees headed by the labour minister -- approved the proposal to restore commutation of pension for 6.3 lakh pensioners who had opted for the benefit. An EPFO panel had recommended for amendment in EPS-95 (Employees' Pension Scheme 1995) for restoration of commuted value of pension to pensioners after 15 years of drawing commutation. Earlier, under EPS-95, members were allowed to commute one-third of their pension for 10 years, which was restored after 15 years. This facility is still available to certain categories of government employees.

6.3 lakh pensioners in India can now withdraw their funds in advance

New Delhi, Retirement fund body EPFO on Thursday started crediting 8.5% rate of interest on employees' <keyword id="45028" type="ORGANIZATION" weightage="20" keywordseo="Provident-Fund">provident fund</keyword> (EPF) for 2019-20 for its over six crore members, a senior official said. A large number of members of the <keyword id="6423266" type="COMPANY" weightage="20" keywordseo="employees-provident-fund-organisation">Employees Provident Fund Organisation</keyword> (EPFO) would be able to see their updated EPF accounts with credit of 8.5 per cent rate of interest for 2019-20, a senior official told . The official further informed that the <keyword id="126926" type="COMPANY" weightage="20" keywordseo="Labour-Ministry">labour ministry</keyword> has already sent the direction to credit the 8.5% interest on EPF for 2019-20 to the EPFO and the body has already started crediting interest into members account for the last fiscal. Labour Minster <keyword id="258830" type="PERSON" weightage="20" keywordseo="Santosh-Gangwar">Santosh Gangwar</keyword> said, "We had said that it would be our endeavour to provide 8.5% rate of interest on EPF for 2019-20. We have issued a notification to provide 8.5% rate of interest on EPF for 2019-20. We have also began the process to credit the said rate of interest into subscribers account." The minister also said that he has asked to ensure that all those members who are retiring on December 31, must get 8.5% rate of interest (for 2019-20). The process for capital gains for payment of 0.35% interest for 2019-20 has also been completed, he added. "It (8.5% interest) would comprise 8.15% from debt income and balance 0.35% (capital gain) from the sale of ETFs (exchange traded funds) subject to their redemption by 31st December, 2020," he said. Earlier in the day, Gangwar had approved the 8.5% rate for last fiscal after receiving the finance ministry's concurrence. Thereafter the direction was sent to the EPFO for crediting the interest on EPF into the subscribers' accounts. In March this year, the EPFO's apex decision making body <keyword id="225704" type="COMPANY" weightage="20" keywordseo="Central-Board-of-Trustees">Central Board of Trustees</keyword> headed by Gangwar had approved 8.5% interest rate on EPF for 2019-20. Earlier in September this year, the EPFO had decided to split 8.5% interest into two installments of 8.15% and 0.35% in its trustees meet headed by Gangwar. But later, the ministry decided to credit the entire 8.5% into subscribers' accounts in one go. SEE ALSO: <a href="https://www.businessinsider.in/stock-market/news/top-stocks-to-watch-tata-steel-vedanta-adani-green-tata-motors-maruti-mm-dhfl-v-mart-indian-bank-and-others/articleshow/80038635.cms">Top stocks to watch — Tata Steel, Vedanta, Adani Green, Tata Motors, Maruti, M&amp;M, DHFL, V-Mart, Indian Bank, and others</a> <a href="https://www.businessinsider.in/tech/mobile/news/checkout-the-list-of-upcoming-new-mobiles-in-january-2021-with-expected-price/articleshow/80039794.cms">Upcoming smartphones in India in January 2021</a> <a href="https://www.businessinsider.in/international/news/ten-of-the-most-outrageous-predictions-for-2021-according-to-saxo-bank/slidelist/80040045.cms">From Amazon buying Cyprus to Germany bailing out France — here are ten of the most ‘outrageous’ predictions for 2021</a>

EPFO begins crediting 8.5% interest for six crore people — to reflect in EPF accounts from new year

The countdown to meet our financial goals has begun. <keyword id="25456" type="ORGANIZATION" weightage="20" keywordseo="financial-planning">Financial planning</keyword> is usually not our most well-thought-out decision as often our primary focus is saving tax. And, though it should play a key role, just saving tax is not necessarily the best way to go about it. The constant need to save tax instead of planning finances methodically, often leads to lack of liquid funds in times of need. It is, therefore, critical that you strike a balance between your long-term and short-term goals. 
 
This new year, make your savings work double time: save tax and get best possible returns. Here, are a few financial instruments in which you can park your money for long-term investment and ensure quick access to funds, if required. 
 
1. <keyword id="114852" type="ORGANIZATION" weightage="20" keywordseo="Public-Provident-Fund">Public Provident Fund</keyword> (PPF): PPFs top every investor’s list, and they should. The Budget 2014-15 made this scheme even more attractive by increasing the annual investment limit to Rs 1.5 lakhs. This scheme is a safe investment option for all, whether salaried or self-employed. The downside, however, is that it is a long-term saving with a lock-in period of 15 years. Further, you can withdraw money from the fund from the 7th year onward and that too only 50% of the balance. 
 
2. National Savings Certificate (NSC): Post offices issue NSCs as a small savings scheme. You can invest in either 5-year or 10-year NSCs. One great advantage offered by NSCs is that there is no upper limit to the amount you want to invest, though tax benefits will be available on an amount of Rs 1.5 lakh or lower only. 
 
3. Unit-linked <keyword id="35450" type="COMPANY" weightage="20" keywordseo="insurance">Insurance</keyword> Plan (ULIP): It is a long-term savings scheme that doesn’t offer much flexibility or decision-making to the investor. You invest for a period of 10-12 years, with a lock-in period of 5 years. Although <keyword id="6362086" type="CITY" weightage="20" keywordseo="Ulips">ULIPs</keyword> allow you to switch between equity and debt, your profits depend on the financial expertise of your fund planner. On the upside, ULIPs provide the investor with a life cover. 
 
4. Equity-linked Savings Scheme (ELSS): It is flexible with respect to investment duration, with a lock-in period of three years. There is no maximum limit to the amount you can invest in an ELSS, and investment of up to Rs 1.5 lakhs offers tax benefits. One of the many benefits of an ELSS is that no tax is levied on withdrawing your investment after the lock-in period. 
 
5. National <keyword id="6354432" type="UNKNOWN" weightage="20" keywordseo="pension">Pension</keyword> Scheme (NPS): NPS is the cheapest market-linked retirement option as the annual fund management charges are a maximum of 0.25% of the amount invested. Your minimum investment criterion will vary according to the tier you are grouped in. You can invest in any one of the three types of NPS funds and divide your corpus according to your risk-taking ability. 
 
6. Post Office Time Deposit (POTD) scheme: It is primarily a small saving scheme, with the duration ranging from 1 year to 5 years. You can earn an interest of about 8.50%, depending upon your investment period. Though the interest is paid annually, it is compounded quarterly. Further, you can now exit the scheme after 6 months, which makes it a handy investment option. 
 
7. Banks’ Fixed Deposits (FDs): Banks offer 5-year FDs that serve the dual purpose of saving tax and investing money safely. You can invest a minimum of Rs 100 and a maximum of Rs 1.5 lakhs. Banks offer interest rate of 8%-9.75%, depending on the bank you choose. However, the interest earned on the fixed deposits is fully taxable. 
Plan now and save for that rainy day. 
 
 
 
(About the author: The article has been written by By Naveen Kukreja, Director, Paisabazaar.com) 
 
Image: Thinkstock

Your DIY For Optimizing Tax Savings and Financial Liquidity

Welcome to the wonderful world of <a href="http://www.businessinsider.in/JACK-BOGLE-An-Elegantly-Simple-Formula-Shows-Why-Passive-Investing-Will-Earn-Higher-Returns-Than-Active-Investing/articleshow/22086333.cms">investments</a>! 
 1. Nominate, Nominate, Nominate: It's presumed that you have an investible surplus either in the form of cash lying idle in the bank account, via salary payments, or you’ve come into money. Either way, the first thing to do is to ensure that you have a nominee in place in your bank account, <keyword id="35450" type="COMPANY" weightage="100" keywordseo="insurance">insurance</keyword> policy, trading-cum-demat account, <keyword id="114854" type="ORGANIZATION" weightage="100" keywordseo="Employee-Provident-Fund">Employee Provident Fund</keyword> account (with your employer) and the Public Provident <a href="http://www.businessinsider.in/Which-One-Is-Better-InvestmentIn-Mutual-Funds-Or-Direct-Investment-Into-Stocks/articleshow/27116001.cms">Fund</a> (with the government). 
 
You may or may not have all of these <a href="http://www.businessinsider.in/If-youve-made-your-first-Mutual-Fund-investment-here-is-what-you-should-do-next/articleshow/47176866.cms">investment</a> avenues, but the ones that you have require a nominee and its best to review the nominee’s name once you get married and later, have a child. Better still, make a will. 
 
2.Pay-Off Debt: You should be assuming as little debt as possible, and <a href="http://www.businessinsider.in/Mortgage-Protection-6-ways-to-come-out-of-a-loan-trap/articleshow/47097827.cms">paying off</a> outstanding credit card bills is of paramount importance. The amount of penal interest that credit card companies charge puts even seasoned money lenders to shame. Have NIL outstanding balance on your credit card. 
 3.Get Term Insurance: If you have dependents, then do ensure that they have at least two years’ worth of expenses to pay for in case something untoward happens to you. Calculate 24 months’ worth of expenses, add 20 percent to them and get a term cover for that amount. Keep adding to your term cover every two years as both your salary and certainly your expenses rise each year. Remember not to confuse insurance with investment. If your advisor tries to lure you into a ULIP or a monthly <keyword id="35471" type="ORGANIZATION" weightage="100" keywordseo="SIP">SIP</keyword>, from an insurance company, masquerading as a Life cover, then you should abandon that advisor immediately. 
 
4.Get Medical Insurance: In addition to the one that your employer offers. Often, people leave an organization in a huff, only to 
realise that they and their family are bereft of any medical <a href="http://www.businessinsider.in/6-pre-marriage-financial-decisions-everyone-should-take-before-saying-I-Do/articleshow/47865034.cms">insurance</a>. The same happens when there are sudden job losses announced by companies. Hence, it is always best to have a parallel medical insurance paid for by yourself. In any case you get a tax benefit in your annual <keyword id="6354751" type="COMPANY" weightage="100" keywordseo="Income-Tax">income tax</keyword> returns. 
 
In addition, keep money worth 5-6 months of expenses in a money market liquid fund so that if you have an unforeseen run-in with your boss, or you decide to go your own way then at least half-year’s worth of expenses are arranged for. Welcome to investing now that most risks are taken care of. 
 5.Public Provident Fund: The government pays you 8.5 percent compounded interest on your PPF <keyword id="6362476" type="ORGANIZATION" weightage="100" keywordseo="investments">investments</keyword>. They also help you save tax. Investments worth 100,000 rupees a year are allowed. These funds are locked in for at least five years and the government allows only a certain amount of money to be withdrawn from the account as it is meant for your old age, when income will dwindle but expenses will keep on rising. 
 There is a lot of debate among <keyword id="143983" type="POSITION" weightage="100" keywordseo="investment-advisors">investment advisors</keyword> whether PPF should be maintained or not considering that the rate of interest often falls below the rate of <keyword id="22195" type="COMPANY" weightage="100" keywordseo="Inflation">inflation</keyword>. However, its best to have some sort of fixed interest bearing income in your investment portfolio and this should be encouraged. 
 
6.Equity Funds: Just run a simple monthly Systematic Investment Plan into a well-diversified equity fund at the start of your professional life. Increase the SIP by 5-10 percent each year as that is what your average annual increment will be. And don’t look at that money till you retire. The best time to start your SIP is today! Do not go into sector specific funds, no matter what your broker tells you. 
 
7. Buying a House: If you can afford one, certainly do so. But do not invest into multiple homes across many cities. It’s a waste of investible surplus, its tax-inefficient, it is relatively ill-liquid and the average returns via rentals over years are much below those earned from equities. 
 
Lots of people feel investing is a very difficult thing to master and hence, prefer to keep money in fixed deposits. While FDs ensure that your capital remains protected, the returns via interest income are taxed, beyond a certain amount of interest earned, and in any case the rate of interest is below inflation rate. It’s a non-efficient way of utilising your money. 
 
If you take these 7 steps then you are cruising on the investment highway! 
 
(Image credits: Indiatimes)

Top 7 things to do as you start to invest

Retirement fund body <a href="http://www.businessinsider.in/searchresult.cms?query=EPFO+">EPFO</a> will invest around Rs 410 crore in exchange trade funds (<keyword id="6357062" type="ORGANIZATION" weightage="60" keywordseo="ETF">ETF</keyword>) every month during the current fiscal. 
 "<keyword id="6372438" type="ORGANIZATION" weightage="80" keywordseo="EPFO">EPFO</keyword> can invest around Rs 410 crore in <a href="http://www.businessinsider.in/searchresult.cms?query=ETF+">ETF</a> every month during this fiscal. The body has planned to invest 5 per cent of its incremental deposits every month," a senior EPFO official told PTI. 
 
The EPFO has received an average monthly incremental deposits of Rs 8,200 crore during this financial year so far. Thus, 5 % of incremental deposits comes to around Rs 410 crore. 
 The Employees' <keyword id="122254" type="ORGANIZATION" weightage="80" keywordseo="Provident-Fund-Organisation">Provident Fund Organisation</keyword>'s (EPFO) apex decision making body the Central Board of Trustees' headed by the Labour Minister <keyword id="115762" type="PERSON" weightage="80" keywordseo="Bandaru-Dattatreya">Bandaru Dattatreya</keyword> had decided in March to start investments in stock market. 
 
However, it was assured to the trustees in the meeting that being cautious about the volatile nature of stock market and with no prior experience of such investments, EPFO will start with investing in ETF during the current fiscal. 
 
An ETF is a security that tracks an index, a commodity or a basket of assets like an index fund, but trades like a stock on an exchange. 
 
Following the CBT decision, <a href="http://www.businessinsider.in/searchresult.cms?query=Labour+Ministry+">Labour Ministry</a> had notified new investment pattern in April which provided that EPFO will invest a minimum of 5 per cent and up to 15 per cent of incremental deposits in equity or equity-related schemes. 
 
However, EPFO has not invested in any ETF so far, the official said that <a href="http://www.businessinsider.in/searchresult.cms?query=SBI+">SBI</a> Mutual funds has be asked to handhold the body for its investments in the ETF and understand the dynamics of <a href="http://www.businessinsider.in/searchresult.cms?query=stock+market">stock market</a>. 
 
(Image: Indiatimes)

EPFO to invest about Rs 410 crore in ETFs every month

The central board of trustees of the <a href="http://www.businessinsider.in/searchresult.cms?query=EPF&amp;sortorder=effectivedate">Employees' Provident Fund Organisation</a> (EPF) has reversed the decision of previous UPA-II government and will now give interest on <a href="http://www.businessinsider.in/searchresult.cms?query=inoperative+accounts&amp;sortorder=effectivedate">inoperative accounts</a> from April 1, 2016. 
 
Inoperative EPF accounts means there has been no contribution from either the employee or the <a href="http://www.businessinsider.in/searchresult.cms?query=employers&amp;sortorder=effectivedate">employer</a> for 36 months. 
 This will benefit around nine crore <keyword id="1907154" type="UNKNOWN" weightage="20" keywordseo="inoperative-accounts">inoperative accounts</keyword> of subscribers switching jobs. 
 
"We have taken a pro-worker decision to give interest on inoperative accounts with effect from April 1, 2016," said labour minister Bandaru Dattatreya. 
 
A sub-committee will be constituted for the same.

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