Having multiple Provident Fund (PF) accounts can be confusing and challenging to manage, especially if you’ve changed jobs or have separate accounts from different employers. If you’re struggling to keep track, here are effective ways to manage two PF accounts and make the most of your hard-earned savings.
Why you might have two PF accounts
Each time you switch jobs, your new employer often opens a new PF account for you, even though you might already have one from your previous employer. This situation leaves you with two accounts and sometimes two UANs (Universal Account Numbers), which can complicate your account management. To simplify your PF, follow these steps:
Step 1: Transfer the old PF balance to the new account
The easiest and most efficient way to manage two PF accounts is by consolidating them. You can transfer the old balance to your new, active PF account. Here’s how:
Visit the EPFO portal: Log in to the Employees’ Provident Fund Organization (EPFO) portal using your UAN and password.
Select the ‘Online Services’ tab: Choose the option for transferring your PF balance from one account to another.
Submit the transfer request: You’ll need to enter details like your old PF account number and the new one to initiate the transfer.
This consolidation keeps all your funds in one place, making it easier to track and manage.
Step 2: Ensure only one active UAN
Having two UANs can cause problems with contributions, withdrawal requests, and interest accrual. If you have multiple UANs, inform your current employer or the EPFO about the issue so that they can deactivate the old UAN and link the PF balance to your current UAN.
How to check your UAN status: Log in to the EPFO portal and check under the ‘Account’ section for any UAN discrepancies.
Contact EPFO support: In case of multiple UANs, contact the EPFO helpline or submit a grievance through the EPFO portal to deactivate the old UAN.
Step 3: Consider withdrawal if eligible
If you are eligible, you can withdraw the balance from your old PF account instead of transferring it. PF withdrawals are generally allowed after two months of unemployment or for certain specified reasons, such as marriage, education, or medical expenses. Keep in mind that withdrawals are subject to tax if done within five years of continuous service.
Steps for withdrawal:
Log in to the EPFO portal.
Choose the ‘Claim’ option under ‘Online Services.’
Complete the claim form to request the withdrawal.
This process can help you avoid managing two accounts if the old PF is not needed for long-term savings.
Step 4: Keep both accounts active if necessary
In certain cases, you may need to keep both PF accounts active (for example, if both accounts have contributions or unique conditions). If so, ensure that both accounts are actively earning interest by checking their status regularly on the EPFO portal.
Prevent inactive status: Accounts become inactive if no contributions are made for over three years. Inactive accounts do not earn interest, so it’s essential to consolidate or transfer your balance to prevent interest loss.
Step 5: Check your PF balance and keep records
To stay updated on your PF savings, regularly check your account balances and transaction history. Keeping records helps you monitor your savings, verify interest payments, and track any transfer or withdrawal requests.
How to check balance: You can check your PF balance on the EPFO portal using your UAN or by sending an SMS to EPFO (type "EPFOHO UAN" to 7738299899).
Step 6: Update KYC details for both accounts
Ensure your Know Your Customer (KYC) details are accurate and updated in both PF accounts. This step will facilitate smooth transfers, withdrawals, and easy tracking. To update KYC details:
Log in to the EPFO portal: Go to the ‘Manage’ section and choose ‘KYC.’
Add or update information: You can update your bank details, Aadhaar, PAN, and other essential information for verification.
Step 7: Avoid penalties and tax implications
Managing two PF accounts incorrectly can lead to complications, including tax issues and penalties. Ensure that your PF records are consolidated or withdrawn properly to avoid any potential tax liabilities, especially when switching jobs.
Tax implications: Withdrawing from a PF account before five years of continuous service could result in tax on the entire withdrawn amount, so plan accordingly.
Having two PF accounts doesn’t need to be overwhelming. By transferring your balance, deactivating duplicate UANs, and staying on top of account details, you can simplify your PF management. Properly managing your PF ensures that you’re maximizing your savings for a secure future and avoiding unnecessary penalties or complications along the way.
Take these steps today to streamline your PF accounts and secure a financially sound future!
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