After Much Discussion, Inoperative EPF Accounts to Accrue Interest | Check Details Here

As per an official release by the Labour Ministry, any EPF Account which lies idle for a period of 36 months or more, it will be marked as inoperative as well as interest shall be accrued on the same.

In an official notification which was issued in context to the Employee Provident Fund (EPF) accounts, the Labour Ministry has relaxed the meaning of the ‘inoperative’ EPF Accounts which are not liable to incur any kind of interest. As per the recent notification, any EPF Account which remains idle for a time period of 36 months or more than that, it will fall under the category of an ‘inoperative’ EPF Account and will be subject to the accrued interest. The official notification released contains all the necessary details related to the EPF Accounts and was issued on 11th November.

EPF Accounts Related Official Notification Released 

The official notification released is a specific development in order to treat the EPF Accounts of the employees as operative in the case of termination of employment. The EPF holder will keep getting the interest until either the EPF account holder readily applies to withdraw the money or opts for a new job within 2 months under an employer who has been covered under the Employee Provident Fund Account scheme. In the case, the employee opts for the option of taking up a new job, the money which is accumulated in the EPF account gets transferred under the new terms of employment. The interest rate payable for the year 2015-2016 was 8.8%.

What used to happen previously was that the EPF Account of an employee was termed as ‘inoperative’, if it had not been active for a period of 36 months or more than that. With effect from 1st April 2011, these kinds of inoperative EPF accounts are not liable for any interest payments. Hence, an employee who resigns from the job and does not take up another job and is even not able to transfer his accumulated share in the EPF account, the accumulated funds in the account will not fetch him any interest. An amendment has been made in relation to the same.

EPF Scheme Provisions

As per the EPF scheme provisions, an EPF account can only be considered inoperative in this case if the employee retires at an age of 55 years from the service or shifts to abroad and does not file an application to withdraw the money which has been accumulated in his EPF account within a time frame of 36 months. Also, if the EPF account holder passes away, his account will become inoperative.

The amendments which have been introduced will prove to be beneficial for all the employees who have left their employment opportunities in order to fulfill their aims and objectives in order to take up the employment opportunities which are not covered with the EPF scheme. Such an EPF fund balance can be left with the authorities in order to get the interest payments. In all, the official resolution has resulted in covering a large number of account folders in order to get the interest payments against the funds which are lying as idle. The homemakers, in this case, will also receive the benefit from this official notification which has been issued recently.


Tulika Gupta

A B.Com Graduate from Punjab University, Tulika Gupta is a playful, high spirited and an energetic soul who loves to read and write. When she is not writing, you can either find her in her dreamer mode or fulfilling her social media instincts. You can write to her at
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