EPF account: Interest rate decision next month. 5 things to know
Premium- Last year, the EPFO interest rates on deposits have been set at 8.5% and the rates for the current financial year will depend on the income projections for the year.
The EPFO (employee provident fund organisation) will announce its interest rates on provident deposits for 2021-22 next month and the decision will be taken at the organisation's top decision making body Central Board of Trustee meeting.
The meeting will be held in Guwahati in March where the proposal for the interest rates would be taken up.
Here are key things to know about the EPFO interest rates
EPF is a mandatory savings scheme under the Employees' Provident Funds and Miscellaneous Provisions Act, 1952. It is managed under the aegis of Employees' Provident Fund Organisation (EPFO). It covers every establishment in which 20 or more persons are employed.
The employee has to a pay a certain contribution towards the provident fund and the same amount is paid by the employer on a monthly basis. At the end of retirement or during the service (under some circumstances), the employee gets the lump sum amount including the interest on PF contributed which gets accrued
Central Board of Trustee, which is a key decision making body for EPFO, takes a call on the interest rates, that have to be provided on the provident fund deposits, every year. Once CBT decides an interest rate on EPF deposits for a fiscal year, it is sent to Ministry of Finance for concurrence.
EPFO provides the rate of interest only after it is ratified by the government through the finance ministry.
Last year, the interest rates on deposits have been set at 8.5% and the rates for the current financial year will depend on the income projections for the year.
Nearly 4.9 crore new subscribers joined Employees' Provident Fund (EPF) scheme during September 2017 to November 2021 period, government data showed.
In March 2020, EPFO had lowered interest rate on provident fund deposits to a seven-year low of 8.5% for 2019-20, from 8.65% provided for 2018-19.
The EPF interest rate provided for 2019-20 was the lowest since 2012-13, when it was brought down to 8.5%.
EPFO had provided 8.65% interest rate to its subscribers in 2016-17 and 8.55% in 2017-18. The rate of interest was slightly higher at 8.8% in 2015-16.
It had given 8.75% rate of interest in 2013-14 as well as in 2014-15, higher than 8.5% for 2012-13. The rate of interest was 8.25% on provident fund in 2011-12.
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