General Provident Fund (GPF): How It Works, Interest Rate, Other Details
General Provident Fund (GPF), a type of provident fund account, is available only for government employees. Interest rates on GPF are revised as per the government’s notifications issued from time to time. At present GPF fetches an interest rate of 8 per cent. A subscriber is required to make monthly contributions towards GPF except during the period when he or she is under suspension. Subscriptions to the general provident fund are stopped three months prior to the date of superannuation, according to pensionersportal.gov.in.
Given below are key features of General Provident Fund (GPF):
1. A government employee becomes a member of GPF by contributing a certain percentage of his/her salary to the account, according to pensioners’ official portal -pensionersportal.gov.in.
2. A subscriber, at the time of joining the General Provident Fund (GPF) is required to make a nomination, conferring on one or more persons the right to receive the amount that may stand to his credit in the fund in the event of his death, before that amount has become payable or having become payable has not been paid, according to pensionersportal.gov.in.
3. For withdrawal from the fund, no documentary proof is required to be furnished by the subscriber.
4. On retirement of a subscriber, instructions are issued for immediate payment of the final balance on retirement. No application is required to be submitted by the subscriber for final payment from the fund.
5. On the death of a subscriber, the person entitled to receive the amount standing to the credit of the subscriber is 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. The additional amount payable under that rule shall not exceed Rs. 60,000. However, to get this benefit, the subscriber should have put in at least 5 years of service at the time of his/her death, according to Provident Fund’s website.