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Wish to Save PF Money Till Retirement? Here’s How To Do It

Provident Fund is a long-term investment scheme from government of India. It is for the welfare of the working population. However, so is the NPS or National Pension Scheme. What makes the two different? Firstly, you can withdraw your PF money before retiring. In the case of NPS, that is not possible. Secondly, PF may or may not be mandatory for you, depending on your organisations’ size and structure. NPS is completely voluntary. In fact, some readers may not have even heard about it until today. However, you can make your PF account work for your NPS account. How? By transferring your PF money to NPS. Here’s how you can transfer PF amount to NPS. Take a look at the steps and then we will talk about why you should take such a step.

Transfer PF Amount to NPS – Steps

Before you begin, you need to have a Tier-1 NPS account. If you have one, here’s what you need to do:

  1. Approach PF trust through your employer and request for funds transfer to NPS.
  2. The PF trust will initiate the transfer as per provisions in trust deed and IT Act.
  3. As an employee, you should request for issuance of a letter to your present employer about the transfer of money taking place.
  4. The present employer will get the amount and has to transfer it in the your NPS account.

Why Transfer PF Amount to NPS

So, why should you really take such a step? Well, here’s why:

  1. In a tier 1 account, your money will keep getting accumulated until you retire.
  2. It is mandatory for government employees However, for private employees, no such rules exist. All the more reason to do so.
  3. Just like PPF, you can create a Tier-2 NPS account. However, unlike PPF, you can withdraw money from NPS Tier-2 account as many times as you like.
  4. You can avail tax deductions on the money saved in the NPS account.
  5. After 15 years of continuous service, you become eligible to withdraw money from NPS account. When you have worked for 25 continuous years, you can withdraw upto 50 per cent o f your NPS contribution.


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