Universal Account Number or UAN is a 12-digit numerical code provided to every individual holding a provident fund (PF) account.
The Employees’ Provident Fund Organisation (EPFO) announced the provision of the Universal Account Number back in 2014. The EPFO introduced this numbering system to eliminate the use of PF account number.
Earlier, every PF account holder had a unique account number, which changed when the employee switched jobs. Thus, employees had to file a claim to transfer their account to the new employer. During the FY 2012-13, the EPFO received more than 12 lakh such claims. The process involved much hassle and took several days.
With the introduction of the Universal Account Number, employees only have to provide it to the new employer when switching jobs. The new account is automatically linked to the old one, where an employee receives the funds.
How to activate Universal Account Number?
Follow the steps mentioned below to active your Universal Account Number –
- Visit EPFO’s official website.
- Click on the “Our Services” tab.
- Select “For Employees.”
- Click on “Member UAN/Online Service (OCS/OTCP)” under the “Services” section.
- Click “Activate UAN” under the “Important Links” section.
- Provide either of the following – your Universal Account Number, member ID, Aadhaar, or PAN.
- Enter your name, date of birth, mobile number, and email ID (optional.)
- Enter the captcha.
- Click “Get Authorisation Pin.”
An OTP will be forwarded to the mobile number you have provided.
- Check the “I Agree” box and enter the OTP.
- Click “Validate OTP and Activate UAN.”
You will receive a message – “Your UAN is activated. The password is sent to your registered mobile number.”
To login to your account, head over to the “Member UAN/Online Service (OCS/OTCP)” page of EPFO’s member portal. Provide your Universal Account Number and password to sign in and view your passbook. Note that it takes 6 hours for your PF passbook to be activated when you have logged in to this portal for the first time. Read: watch online movies
How to read your passbook?
Your passbook shows the following –
- Total ER Balance – Deposits made by your employer.
- Total EE Balance – Deposits made from your salary.
Details of the contributions made by you and your employer per month are provided below.
Currently, both employees and employers contribute 12% each to the provident fund. However, 8.33% of the contributions made by an employer goes to the Employees’ Pension Scheme while the rest 3.67% goes into the Employees’ Provident Fund.
Benefits of investing in a provident fund
The primary benefit of investing in EPF is the high rate of interest. As of FY 2019, the government offers a rate of 8.65%. It also offers income tax benefit up to Rs. 1.5 Lakh under Section 80C.
Additionally, there are also several ways you can use your EPF money; for example, investing in fixed deposits.
However, there are specific conditions for withdrawal of the corpus, like –
- Medical emergency – Amount restricted to employee’s 6 months’ salary + DA or his/her share with interest, whichever is lower.
- Education and wedding – Allowed after 7 years; restricted to 50% of employee’s share.
- Home renovation – Allowed after 5 years; restricted to 12 times of employee’s salary.
- Home loan repayment – Allowed after 10 years; restricted to 90% of employee and employer’s share.
- Plot purchase – Allowed after 5 years; restricted to 24 times of employees monthly salary + DA.
- Purchase/construction of a property – Allowed after 5 years; restricted to 36 times of employee’s salary + DA.
Additionally, employees can withdraw the corpus from the UAN portal if they are unemployed for more than 2 months or when they reach the age of 58.
Hence, a fixed deposit can be more beneficial than EPF since these don’t have any restrictions for withdrawal. You can withdraw the sum prematurely by paying a nominal penalty fee. 5-year tax-saver fixed deposits also provide you income tax exemptions up to Rs. 1.5 Lakh under Section 80C.
NBFCs like Bajaj Finance offer Fixed Deposits with interest rates of up to 8.60% along with several added benefits for investors. Senior citizens can also avail 0.35% additional interest over this rate.
Lastly, fixed deposits are available as either cumulative or non-cumulative FDs, with the latter providing periodic interest pay-outs. FDs also enable you to avail secured loans or credit cards against them as per a certain percentage of the available funds.