Provident is employer right and every employer own one provident fund account. There are many types of provident funds available in the market. Some types of provident funds may be optional and some are mandatory. The PF amount will depend on basic salary and organization based. During our retirement or when you leave organization you would get provident funds back depending on our salary and on your working time period in that organization. Employer Provident Fund Organization (EPFO) is largest social organization in India for provident funds. Government made many provident fund acts. Organization will add same amount to our provident fund account. Variations and importance of different types of provident funds are listed below.
Types of Provident Funds
- EPF is basic type that is mandatory for any type of employer. Employer Provident Fund is accumulation of every month some percentage of monthly salary depending on our basic salary deducted and contributed for Employer Provident Fund. For this small amounts employer organization will add 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.
- Statutory Provident Fund is a 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.
- Recognized fund is a 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.
- Public fund is a type that 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.