Wednesday, July 6, 2022
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Govt Ratifies Interest on Employees’ Provident Fund to 8.1%; Lowest in 4 Decades

Now, after the ratification of the interest rate by the government, the EPFO would start crediting the fixed rate of interest for the fiscal into the EPF accounts.

The 8.1 percent EPF rate of interest is the lowest since 1977-78, when it stood at 8 percent. The 8.5 percent interest rate on EPF deposits for 2020-21 was decided by the Central Board of Trustees (CBT) in March 2021. It was ratified by the finance ministry in October 2021.

Thereafter, the EPFO issued directions to field offices to credit the interest income at 8.5 percent for 2020-21 into the subscribers’ account.

An EPFO trustee, KE Raghunathan, who represents employers, said the speed with which the ministries of labour and finance have cleared the interest rate is really appreciable, considering the dire need of funds in the hands of employees and it will help them meet expenses such as educational needs of their children.

The EPF interest rate provided for 2019-20 was the lowest since 2012-13, when it was brought down to 8.5 percent. EPFO had provided 8.65 percent interest rate to its subscribers in 2016-17 and 8.55 percent in 2017-18.

The rate of interest was slightly higher at 8.8 percent in 2015-16. It had given 8.75 percent rate of interest in 2013-14 as well as 2014-15, higher than the 8.5 percent for 2012-13. The rate of interest was 8.25 percent in 2011-12.

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