EPFO advises subscribers to always keep their UAN updated and stay updated on the official EPFO portal or app. This initiative will achieve 100% auto-settlement at ground zero. There will be no need to visit the office with documents.
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Employees’ Provident Fund Organisation (EPFO) members will now be able to transfer money directly from their EPF account to their bank account using UPI. According to a top Labour Ministry source, this new facility will be operational from April 2026 this year. This change is a significant step towards providing bank-level facilities to EPFO and providing more flexibility, faster withdrawals and simplified procedures 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 Labour Ministry is working on a project in which a certain portion of the EPF will be frozen, and a major portion will be available for withdrawal from their bank account using Unified Payment Interface (UPI).
How will the new system work?
The Ministry of Labour is working on a major project which will:
A portion of the EPF balance (minimum 25%) will be frozen (locked) to ensure sufficient funds for retirement.
The remaining substantial portion (up to approximately 75%) will be available for withdrawal directly to members’ bank accounts via UPI.
Members will be able to check their eligible balance through UPI apps or ATMs and make secure transfers by entering their UPI PIN.
Once transferred, the funds will be credited to their bank account and can be used through UPI payments, ATM withdrawals, or other methods.
Software Updates and Key Benefits
EPFO is updating its software to ensure smooth, glitch-free operation.
This feature will benefit approximately 8 crore EPFO members.
Currently, EPF withdrawals require filling out forms and waiting, which is time-consuming.
Under the new auto-settlement system, claims will be settled electronically within three days.
The auto-settlement limit, which was previously ₹1 lakh, has now been increased to ₹5 lakh.
Why is a new system necessary?
It will provide immediate funding for essential expenses such as illness, education, marriage, and home construction.
During COVID-19, the EPFO introduced online auto-settlement, providing rapid assistance to those in need. With
over 50 million claims processed annually, the new system will significantly reduce EPFO’s time and workload.
New EPF withdrawal rules
100% of the eligible EPF balance (employee + employer portion) will be available for withdrawal, but a minimum 25% balance will always be maintained in the account.
The current EPFO interest rate is 8.25% per annum, which, through compounding, helps grow the retirement corpus. The
previously 13 complex rules have been simplified into just 3 major categories:
Essential needs (sickness, 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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