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    Your EPF corpus can make you a crorepati. This is how

    Your EPF corpus can make you a crorepati. This is how

    Your EPF corpus can make you a crorepati. This is how
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    By Anshul   IST (Published)

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    In EPF accounts, the employees contribute 12 percent of their salaries, and an equal amount is contributed by the employers. So this doubles up the monthly savings.

    Most people dread looking at their payslips and seeing how much it has been pared down because of various deductions. But one of these deductions—the monthly contribution to the Employees' Provident Fund—should make you glad (EPF).
    Pitam Goel, Founder Partner, Tattvam & Co stresses that it is one of the savings schemes which focuses on retirement benefits like no other. “In the long run, it can even help one in earning more than Rs one crore,” he states.
    In EPF accounts, the employees contribute 12 percent of their salaries, and an equal amount is contributed by the employers which double up the monthly savings.
    The interest earned on the deposit is tax-free and to add to it, the current interest offered on the EPF scheme is higher than what any bank offers on fixed deposits. According to reports,  EPF investment for the current quarter fetches 8.5 percent.
    So, what do you have to do to accumulate more than one crore through EPF investment?
    According to Goel, if one does a quick back of envelope calculations, an individual aged 21 years, say who starts his/her career with a package of Rs 2,10,000 and gets an annual increment of eight percent each year would easily get over Rs 2 crore on retirement.
    While a lot of assumptions are at play in this calculation, Goel says that it fairly reflects how EPF is one of the most beneficial savings schemes out there right now.
    Shams Tabrej, Financial Expert, Founder & CEO at Ezeepay also stands firm on this view and said that it is indeed possible to earn Rs one crore through EPF. However, his calculations are different from that of Goel.
    “The EPF can grow into a gargantuan Rs 2.42 crore if subscribes do not ever withdraw from it till they retire. A part of basic salary can make them a crorepati when they retire,” he says.
    It’s important to note here that the contributions from the employers also play a crucial role here. The power of compounding further adds to the retirement savings over the long term.
    "12 percent of the basic salary goes into EPF. 8.33 percent, a maximum of Rs 15,000 goes to EPS and the balance goes to PF. The 8.5 percent interest earned on the EPF can help a person with a basic salary of Rs 25,000 a month accumulate a gargantuan Rs 1.65 crore in 35 years," he points out.
    With different calculations at hand, it's vital to understand that EPF is one of the most beneficial savings and one should avoid withdrawing from its corpus. To conclude, the goal shouldn't be to earn Rs one crore but to save a fraction of salary every month through it.
    Disclaimer:
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