Can I withdraw my provident fund?

Yes, you can withdraw your provident fund in South Africa. However, there are some rules and restrictions that you need to be aware of.

To withdraw your provident fund, you must first apply to your provident fund administrator. You can usually do this online or by filling out a paper form. You will need to provide your personal details, your provident fund account number, and the reason for your withdrawal.

There are three main reasons for which you can withdraw your provident fund:

  • Retirement: If you are retired, you can withdraw your provident fund in full.
  • Emigration: If you are emigrating from South Africa, you can withdraw your provident fund in full.
  • Hardship: If you are experiencing financial hardship, you may be able to withdraw some or all of your provident fund.

If you resign, or you are retrenched, you are allowed to withdraw from your employer-sponsored retirement fund (that is a pension or provident fund). The “benefit” you can claim is the balance in your retirement account. Once you have withdrawn, you have no other claim against that fund.

Before retirement, you can only access your provident fund if you resign from your current employer. You can then withdraw from the provident fund, and claim your fund credit as a cash lump sum. You will pay tax on any lump sum above R22 500. You other option is to apply for a loan, but this must used for a purpose as contemplated by s19(5) of the Pension Funds Act (essentially housing-related), and such loan must be permitted by your provident fund’s specific rules.

Does Provident Fund accumulate interest?

Interest Rate. The interest rate for the EPF for the year 2018-19 currently stands at 8.65 percent. However, this interest is not applied at the end of the year but it is calculated at the end of every month. It is then deposited into the EPF account after the financial year is complete.

Things to keep in mind about withdrawing your provident fund in South Africa:

  • You cannot withdraw your provident fund before you are 55 years old, unless you are withdrawing for hardship reasons.
  • If you are withdrawing your provident fund for retirement or emigration, you may be able to withdraw your money tax-free, up to a certain amount.
  • If you are withdrawing your provident fund for hardship reasons, you may have to pay tax on your withdrawal.
  • You may be able to transfer your provident fund money to a retirement annuity, which can provide you with a monthly income in retirement.