Types of Provident Funds and its Importance

Types of Provident Funds and its Importance

Any Regular employee will have to pay PF. Some types of provident funds may be optional and some will be mandatory payment. The PF amount will depend on salary and organization based. We will get back PF during your retirement. When you leave organization also you would get provident funds depending on our salary and on your working time period in that organization. Employer Provident Fund Organization is largest social organization in India for provident funds. While leaving any organizations you must get your PF which is collection of your small amount of monthly salary. The organization also will add same amount to your account of provident fund. There are different types of provident funds in India. Types and importance are listed below…

Types of Provident Funds:

EPF (Employer Provident Fund):

Every month some percentage of monthly salary depending on our basic salary will be deducted and contributed for Employer Provident Fund. For this small amounts employer organization also adds equal amounts to provident fund account. Both employee and employer will simultaneously invest in provident fund account. These accumulated amounts we can get back at the time of resignation or retirement.

SPF (Statutory Provident Fund):

This type of fund is possible only for government and semi government employees. This scheme was added under the act of Provident Fund act 1925. University based or educational based employees are also eligible under Statutory Provident Fund.

RPF (Recognized Provident Fund):

This type of provident fund is optional for employees. Any person with more 20 people in an organization can nominate his/ her name under Recognized Provident Fund.

PPF (Public Provident Fund):

This type was added under provident fund act 1968. In addition to all the above provident funds we can also add Public Provident Fund account. Any person can open his/ her account under Public Provident Fund.

 



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