epf

Is using EPF amount to buy a new house a good idea?

Due to the high price of the properties, it’s impossible for most of the prospective buyers to purchase a flat or house by paying the entire amount upfront. In such situations, buyers turn to banks for home loans for which lenders seek a down payment of up to 20 percent. Arranging this kind of money for down payments can be a tough task for many. Some even think of retreating money from their Employee Provident Fund (EPF) accounts. But is it a wise idea? Let’s see how it works. As per the new EPFO rules, the subscribers can withdraw 90 percent of EPF accumulations to fund the purchase or construction of house or flat. You can additionally avail the interest payment subsidy on Pradhan Mantri Awas Yojana (PMAY) on the payments made for home buying through EPF. Moreover, to be eligible for withdrawal from EPF account, you must be associated with EPF for at least three years and have at least Rs 20,000 account balance. Looking at the benefits, it sounds a good option for salaried individuals. But is it really that smart? EPF is designed to provide a regular income stream for you in retirement. This is designed to meet your income requirements when you are no longer working. Hence, i

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