Employees’ Provident Fund Organization (EPFO) members will now be able to transfer money from their EPF account directly to their bank accounts through UPI. According to a top source in the Labor Ministry, this new facility will start operating from April 2026 this year. This change is an important step towards providing bank-level facilities to EPFO and providing more flexibility, faster withdrawals and simplified process to the members. Members are advised to keep their UAN updated and keep an eye on the official EPFO portal or app. According to sources, the Labor Ministry is working on a project in which a certain portion of the EPF will be frozen, and a larger portion will be available to be withdrawn from their bank accounts using the Unified Payment Interface (UPI).
How will the new system work?
The Labor Ministry is working on a big project, which will:
A portion of the EPF balance (minimum 25%) will be frozen (locked), so that sufficient amount remains for retirement.
Members will be able to withdraw the remaining major portion (up to about 75%) directly into their bank accounts through UPI.
Members will be able to view eligible balance through UPI apps or ATM and make secure transfers by entering UPI PIN.
After transfer, the money will come to the bank account, which can be used through UPI payment, ATM withdrawal or other methods.
Software Updates and Key Benefits
EPFO is updating its software so that this system runs smoothly without any glitch.
This facility will benefit about 8 crore EPFO members.
Currently EPF withdrawal requires filling forms and waiting, which is time consuming.
Under the new auto-settlement system, claims will be settled electronically in 3 days.
The auto-settlement limit was earlier ₹1 lakh, which has now been increased to ₹5 lakh.
Why is a new system necessary?
This will provide immediate funds for essential expenses like illness, education, marriage, house construction etc.
During COVID-19, EPFO had started online auto-settlement, which provided faster help to the needy.
More than 5 crore claims are settled every year, the new system will significantly reduce the time and workload of EPFO.
New rules for EPF withdrawal
100% of the eligible EPF balance (employee + employer share) will be available for withdrawal, but a minimum of 25% balance will always be maintained in the account.
The current interest rate of EPFO is 8.25% per annum, which helps in increasing the retirement corpus with compounding.
The previously 13 complex rules have been simplified into just 3 major categories:
- Essential needs (illness, education, marriage)
- housing needs
- special circumstances
This will enable 100% auto-settlement and in most cases no documentation will be required.
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