EPFO Plans to Automatically Settle Rs 5,200 Crore in Inactive PF Accounts
Synopsis
The EPFO is gearing up to automate the settlement of unclaimed funds in inactive accounts, potentially impacting 8 lakh subscribers and totaling Rs 5,200 crore in funds. This innovative approach could streamline access to long-overdue funds.
Key Takeaways
EPFO is automating the settlement of unclaimed funds.
Approximately 8 lakh accounts will benefit in the first phase.
Total unclaimed funds amount to Rs 5,200 crore.
Direct transfers will streamline access to funds.
Inactive accounts may not earn interest after 36 months.
New Delhi, March 23 (NationPress) The Employees' Provident Fund Organisation (EPFO) is reportedly intensifying its efforts to address unclaimed funds stored in inactive accounts by implementing an automated settlement system.
This new system aims to directly deposit the unclaimed balances into the subscribers’ bank accounts linked to their Aadhaar, eliminating the necessity of filing claims.
In the initial phase, approximately 25% of Aadhaar-verified inactive accounts are expected to be processed, allowing beneficiaries to access their pending funds effortlessly, as per reports.
It is anticipated that this initiative will include around 8 lakh Aadhaar-verified inactive accounts, with a total estimated value of Rs 5,200 crore.
Among these, nearly 14,000 accounts contain unclaimed balances exceeding Rs 5 lakh, while around 38,000 accounts hold between Rs 1 lakh and Rs 5 lakh. Additionally, approximately 41,000 accounts have funds ranging from Rs 50,000 to Rs 1 lakh.
The Central Board of Trustees has already given the green light for the automatic settlement of inactive accounts that have balances of up to Rs 1,000, facilitating direct transfers to registered bank accounts.
As of now, the EPFO has not released an official statement regarding this initiative.
An EPFO account becomes inactive when it ceases to earn interest, which typically happens after a member retires at age 55 and does not contribute for three consecutive years.
However, for individuals younger than 55, interest continues to accumulate until they reach 58.
As of February 2026, the EPFO reported approximately 31 lakh inactive accounts containing unclaimed deposits totaling Rs 10,181 crore.
Out of these, nearly 7 lakh accounts are over two decades old, while 18 lakh accounts fall within the 10 to 20 years range, and about 13 lakh accounts are between 5 and 10 years old.
Earlier, the EPFO announced an interest rate of 8.25% for the employees’ provident fund (EPF) deposits for 2025-26, maintaining the same rate for the second consecutive year.
However, accounts that remain inactive for 36 months do not accrue any additional interest, as they are classified as dormant.
Point of View
Aiming to alleviate the burden of unclaimed funds. By automating the settlement process, the organization not only enhances efficiency but also ensures that beneficiaries have easier access to their hard-earned savings. This move, while beneficial, also highlights the need for ongoing awareness about account management among subscribers.
NationPress
10 May 2026
Frequently Asked Questions
What is the new settlement system by EPFO?
The EPFO is introducing an automated settlement system that will directly credit unclaimed funds from inactive accounts into Aadhaar-linked bank accounts, simplifying the process for beneficiaries.
How many accounts will be affected?
Approximately 8 lakh Aadhaar-verified inactive accounts are expected to be processed in the first phase, involving a total of Rs 5,200 crore.
What happens to inactive accounts?
An EPFO account is classified as inactive when it stops earning interest, usually after a member retires at 55 and does not contribute for three years.
Is there a limit on the balances for automatic settlement?
Yes, the automatic settlement will cover inactive accounts with balances of up to Rs 1,000.
What interest rate is currently offered for EPF deposits?
The EPFO has set an interest rate of 8.25% for EPF deposits for the fiscal year 2025-26.
