The Employee Provident Fund Organisation has introduced changes to its system to provide workers with a more streamlined process for withdrawals.

Employees can withdraw money from their Provident Fund to deal with financial emergencies and job transitions. However, repeated withdrawals can harm your financial future in the long run. It can leave you with little money for a retirement nest egg and may even complicate your dreams of buying your dream home later on.

If you want to withdraw money for emergencies but do not want to reduce your PF, here are some alternatives you can look into.

Alternatives To PF Withdrawal For Emergencies

  • Personal loan: A personal loan is one of the easiest options to go for in case of emergency expenses. Many financial and non-financial institutions offer loans at attractive interest rates for a variety of purposes. One should opt for the debt after comparing different lenders, their interest rates and tenures to get the best possible deal. Alternatively, if you need extra money for urgent renovation on your home, a home loan with a top-up facility can be considered.

  • Increase your income: If you feel that you might have to spend more for a longer period, the alternative to EPF withdrawal could be freelancing to increase your income. Many websites offer freelancers a chance to offer their services for a minimum fee.

  • Mutual fund loans: In case of emergencies, one can take loans against financial investments like mutual funds. This provides an effective way to gather funds instead of partial or full PF withdrawals.

  • Overdraft facility: An overdraft facility linked to your savings account is offered by several banks. This allows you to pay interest only on the amount you use. This is a short-term credit option and cannot be used for a longer duration.

  • Gold loans: If the employee has gold jewellery, they can use that to get a secured loan for any emergencies. This will allow them to retain their retirement savings.

  • PF Withdrawal: If one withdraws their PF amount, it means there is a disruption in their retirement funds. Taking money from the fund can harm your future plans and leave you worse off financially in the long run. A PF withdrawal is allowed only under certain conditions. This includes medical emergencies, the construction of a house, educational purposes, and unemployment. Employees should read the terms and conditions of the withdrawal carefully before starting the process. 

. Read more on Personal Finance by NDTV Profit.A personal loan is one of the easiest options to choose in case of emergency expenses when you don’t want to withdraw from your PF fund.  Read MorePersonal Finance 

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