GP Fund full form
What is the full form of GP Fund?
GP Fund, also known as General Provident Fund is a pension or savings scheme. It is a type of PPF (Public Provident Fund) account but only available for government employees in India. GP Fund is managed by the Department of Pension and Pensioner’s Welfare under the Ministry of Personnel, Public Grievances and Pensions. GP Fund is a scheme where it allows government employees to deduct a certain percentage of their salary from the General Provident Fund. The total amount accumulated during the employment period (including the extra interest amount) is paid back to the employee at the time of retirement.
- What is the full form of GP Fund?
- General Information about GP Fund
- Eligibility Criteria
- Terms and Conditions of GP Fund
- Benefits of GP Fund
- Nomination Benefit
- Death Benefit
General Information about GP Fund
Provident Fund is of three types-
General Provident Fund (GPF)
Public Provident Fund (PPF)
Employees Provident Fund (EPF)
Despite all these falling under Provident Fund, they vary in their feature, contribution, terms and conditions, and benefits. The interest rate of the GP Fund varies from time to time according to the government’s issued notifications.
Once a government employee has signed up for a GP Fund, he or she needs to compulsorily contribute the money unless there is some case of suspension. According to the government pension rules, payment for the GP Fund is usually stopped three months prior to the date of retirement.
Eligibility Criteria
The concerned person should be, first of all, a government employee. He/She must be a resident of India. It is compulsory for all government employees belonging to a certain salary class to have a GP Fund. A private sector employee is not eligible for having a GP fund.
The government employee signing up for a GP Fund account requires to make a nomination in the name of any family member at the time of joining the fund in the prescribed form. Temporary government employees who have a record of working for at least one year in the government sector are eligible for opening a GP Fund account.
Terms and Conditions of GP Fund
The subscriber of the fund must have to pay at least 6% of his/her total income. The subscriber can not pay any amount that exceeds his/her salary amount. The subscriber has to make a payment every month for the fund. But this does not apply when the subscriber is in suspension.
Any government employee who has completed one year of his/her service has to compulsorily join the scheme. The subscriber must complete at least 10 years of his/her service before being eligible to withdraw the amount from the GP Fund account.
Benefits of GP Fund
The GP Fund scheme allows premature withdrawals. The criteria are-
The subscriber can withdraw his/her 12 months’ salary or 75% of the total amount in the fund, whichever is lower. This can be done in case of any educational purpose or ceremonies like a marriage of self or any dependent family member.
The subscriber can withdraw 75% of the total amount of GP Fund for any purpose related to living, like purchasing a house, buying land for building a house, repaying an existing home loan, repairing the ancestral house, or reconstructing or renovating of home.
The subscriber can withdraw up to 75% or three-fourths of the cost of a vehicle, whichever is lower for any purpose related to a vehicle, like buying a vehicle, making a deposit for purchasing a vehicle, repayment of a car loan, or repairing a vehicle.
The subscriber can withdraw an amount up to 90% of the total amount present in the fund account for illness of self or a dependant family member. According to the new GP fund rules, one can withdraw the amount within 7 days for this purpose.
Nomination Benefit
The nominee done by the subscriber deserves the right to receive the total amount of money in the GP Fund Account. Also, the nominee need not show any documentary proof while withdrawing the amount from the fund account.
Death Benefit
According to the GP Fund rules, the nominee gets an additional amount in case of the death of the subscriber. The additional amount is equal to the average balance in the GP Fund account for 3 years immediately preceding the death of the subscriber. However, there are a few terms and conditions for this.
Frequently Asked Questions (FAQs)
Parents, children, spouse, minor brother, unmarried sister, deceased son’s widow and children. A female subscriber on her will can exclude her husband from the list of family members.
Nomination is important to make sure the right of one or more persons to receive the money in case of the demise of the subscriber before the amount becomes payable or having become payable has not been paid to the subscriber. The nomination should be treated as a confidential matter.
Yes, if he/she has a family.
A subscriber is allowed to take an advance once every 6 months.
The minimum contribution that needs to be made is Rs. 500 per year, and the maximum is Rs. 1.5 Lakh per year.