How interest will be calculated on dormant EPF account
EPFO had stopped paying interest to dormant accounts from 1st April 2011. From 1st April 2016 all EPF account holders including the ones with dormant accounts will earn an interest as applicable for the financial year for all account holders.
There was a call to make interest rate applicable retrospectively for the time between 1st April
2011 and 31st March 2016, the final decision on this is yet to be taken by EPFO. The interest rate is set up annually by the EPFO.
Will EPF accounts be again considered dormant if not used for a certain time?
No with the new regulations in place the concept of an inoperative or dormant account for EPF account has been laid to rest for good. So even if you do not actively operate your EPF account for any reason for any length of time, your account will continue to earn interest and not get
As per last year’s amendments, if an EPF account has been lying idle for 36 months or more, it will not become automatically inoperative. It will continue to accrue interest. The provisions of the EPF scheme have now been amended to change the definition of inoperative. As per the provisions, an EPF account will become inoperative only if the employee retires from service after reaching the age of 55 years or if they go abroad permanently. In both these cases, if an application for withdrawal of the EPF is not made within 36 months, then the account becomes inoperative. So, even if you are terminated or leave a job, your EPF account will be active and you will continue to earn interest on your EPF account.