The Employees Provident Fund
Organization (EPFO) reduced the interest rate on provident fund deposits to 8.5
per cent for the current financial year 2019-20. This is the lowest level in
seven years. EPFO paid 8.65% interest on EPF to its 6 crore members for
2018-19. The decision to reduce interest was made by the Central Board of
Trustees (CBT) of EPFO, the apex decision-making body in EPFO. The latest EPFO
decision will be sent to the Finance Ministry for approval, as the EPF
guarantor is the central government. The Finance Ministry has been insisting on
increasing the interest rate of EPF to the same rate as other small savings
schemes of the government like PPF and Post Office Savings Schemes.
EPF interest rates in the last few years
Financial
Year
|
Rate
of Interest on EPF
|
2018-19
|
8.65 %
|
2017-18
|
8.55 %
|
2015-16
|
8.65 %
|
2014-15
|
8.80 %
|
2014-15
|
8.75 %
|
2013-14
|
8.75 %
|
2012-13
|
8.50 %
|
After the meeting, Labor Minister
Santosh Gangwar said that it has been decided to reduce the interest rate on
EPF to 8.5 per cent for the financial year 2019-20. He informed that if 8.5%
interest will be paid on EPF in the current financial year, then EPFO will
have a surplus of more than Rs 700 crore. A source in the ministry said that if
8.55 per cent interest was paid on EPF in this financial year, the EPFO would
have a surplus of more than Rs 300 crore. Had the interest rate been kept higher
than 8.55 per cent, the EPFO would have incurred losses. The new interest
rate of EPFO is the lowest since 2012-13. Even in 2012-13, the EPFO
interest rate was 8.5 per cent.
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