The government actually invests the money in this provident fund. EPFO also invests a large portion of the money deposited in this provident fund in debt funds like government bonds.
EPFO News: Whether you work in a government or private organization, some part of your salary is deducted for the Provident Fund. All organizations deduct money from this Provident Fund. The money that is deducted from your salary is deposited in the PF account. Like a bank account, interest is earned on the money deposited in this PF account, the same amount of money that is deducted from your salary is also deposited by the government.
Now the question is, what does the government actually do with the money you deposit in this PF? Does the government invest this money somewhere else? Or does this money always remain in the PF? Let’s know the details.
What happens to the Provident Fund money?
If you think that your Provident Fund money always remains in the account, then you are wrong. Actually, the government invests the money in this Provident Fund. The Employees Provident Fund Organization invests your EPF money in accordance with government policies. This investment is made in accordance with the rules of the Union Finance Ministry and the Central Board of Trustees.
What does the government do with this money?
EPFO also invests a large part of the money deposited in this Provident Fund in debt funds like government bonds. As of March 31, 2024, the total amount deposited by the Employees Provident Fund Organization is Rs 24.75 lakh crore. Out of this, the Central Government has invested Rs 22.41 lakh crore in debt funds.
Investment in Exchange Traded Funds
The government also invests a part of EPFO in the stock market. The government mainly invests in this through ETFs or Exchange Traded Funds. This investment is mainly based on the BSE Sensex, NSE Nifty 50 indices. EPF first started making this investment in August 2015. EPF invests in all the indices that track Indian companies, such as India 22 and Capex. However, the government has made it clear that EPFO never directly invests its savings in any specific stock.
