What is the General Provident Fund (GPF)?

About General Provident Fund (GPF):

• It is a savings scheme introduced in 1960 that is available only for government employees in India. 
• The primary objective of GPF is to provide a dependable source of income after retirement to government employees.
• With a GPF account, all the government employees can contribute a certain percentage of their salary to the GPF.
• Unlike the Employees Provident Fund (EPF), the contributions toward the GPF are made only by the employee.
• The total amount that is accumulated throughout the employment term is paid to the employee at the time of retirement.
• As per the GPF rules, the following are eligible to subscribe to a GPF account:
  • All temporary government servants who have given their service for continuously one year.
  • All re-employed pensioners(except those eligible for admission to the contributory provident fund).
  • All permanent government servants.
• Contribution:
  • It is a mandatory scheme for government employees, requiring them to contribute a certain percentage of their salary towards the fund. 
  • The contributions are deducted from the employee's monthly salary, and the amount earns interestat a predetermined rate.
  • The amount for GPF subscription is fixed by the subscriber The minimum contribution is 6% of the salary, while the maximum can go up to 100%.
• Withdrawal:
  • Employees can withdraw their savings from the fund upon retirement or resignation from service.
  • A GPF is flexible, allowing employees to withdraw money from the fund for various reasons, such as marriage, education, and medical emergencies.
  • Employees can also take out loans against their GPF account, subject to certain conditions.
  • Employees who transfer to another government department or leave their job can withdraw their GPF balance or transfer it to their new employer.
  • The GPF sum will be paid to their nominee if the employee passes away.
• Interest rates on GPF are revised periodically according to the government’s issued notifications. 
• The GPF scheme is administered by the Department of Pension and Pensioners’ Welfare,falling under the Ministry of Personnel, Public Grievances and Pensions.
• This scheme offers several benefits to government employees, including tax savings, low-risk investments, and guaranteed returns.