Government ratifies EPF interest rate of 8.1% for 2021-22, lowest in 4 decades
The government has approved an 8.1% interest rate on deposits to the Employees Provident Fund (EPF) for 2021-22 – a four-decade low – for around five crore subscribers to the pension fund body. EPFO retirement.
Earlier in March this year, the Employees Provident Fund Organization (EPFO) decided to reduce interest on deposits in the provident fund for 2021-22 to 8.1% from 8.5% in 2020-21.
According to an EPFO office order issued on Friday and reviewed by the PTI, the Ministry of Labor and Employment has conveyed central government approval to credit an interest rate of 8.1% for 2021-22. to each member of the EPF scheme.
The Ministry of Labor had sent the proposal to the Ministry of Finance for its approval. Now, after the government ratifies the interest rate, EPFO would start crediting the fixed interest rate for the year to the EPF accounts.
The EPF interest rate of 8.1% is the lowest since 1977-1978, when it was 8%. The 8.5% interest rate on ETH deposits for 2020-21 was decided by the Central Board of Trustees (CBT) in March 2021.
It was ratified by the Ministry of Finance in October 2021. Subsequently, the EPFO gave instructions to field offices to credit interest income at 8.5% for 2020-21 to the account of subscribers.
An EPFO administrator, KE Raghunathan, who represents the employers, said the speed with which the labor and finance ministries cleared the interest rate is truly appreciable, given the urgent need for funds in the hands of employees and it will help them to meet expenses such as the educational needs of their children.
In March 2020, the EPFO had lowered the interest rate on Provident Fund deposits to a seven-year low of 8.5% for 2019-20, from 8.65% in 2018-19.
The forecast EPF interest rate for 2019-20 was the lowest since 2012-13, when it was reduced to 8.5%. EPFO had provided an interest rate of 8.65% to its subscribers in 2016-17 and 8.55% in 2017-18.
The interest rate was slightly above 8.8% in 2015-2016. It had granted an interest rate of 8.75% in 2013-14 and 2014-15, higher than the 8.5% of 2012-13. The interest rate was 8.25% in 2011-2012.
(Only the title and image of this report may have been edited by Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)