The government has approved a four-decade low interest rate of 8.1 per cent on Employees’ Provident Fund deposits for 2021-22, news agency PTI quoted the EPFO office’s order as saying. About five crore subscribers of the Employees’ Provident Fund Organization (EPFO) will be affected by this decision.
The retirement fund body had in March decided to pay 8.1 per cent interest on provident fund deposits for the financial year 2021-22, from 8.5 per cent earlier. 8.1 percent epf interest rate The lowest since 1977-78, when it stood at 8 per cent.
The Ministry of Labor and Employment has conveyed the approval of the Central government to credit 8.1 per cent interest rate for 2021-22 to every member of the EPF scheme, according to a PTI report quoting the EPFO office order issued on Friday. The Labor Ministry had sent the proposal to the Finance Ministry for consent.
The 8.5 per cent interest rate on EPF deposits for 2020-21 was fixed by the Central Board of Trustees (CBT) in March 2021. CBT is a tripartite body of EPFO consisting of representatives of Government, Employees and Employers and is the decision of CBT. binding on EPFO. It is headed by the Minister of Labor.
This was ratified by the Finance Ministry in October 2021. Thereafter, the EPFO issued instructions to the field offices to credit the interest income at 8.5 per cent in the account of subscribers for 2020-21.
EPFO trustee, KE Raghunathan, who represents the employers, said the speed with which the labor and finance ministries have approved the interest rate is indeed commendable, given the dire need of funds in the hands of employees and this They will be helped to meet such expenses. As to the educational needs of your children. According to a PTI report, in March 2020, the EPFO had reduced the interest rate on provident fund deposits from a seven-year low of 8.5 per cent for 2019-20 to 8.65 per cent in 2018-19.
The EPF interest rate provided for 2019-20 was the lowest since 2012-13, when it was reduced to 8.5 per cent. EPFO had provided 8.65 per cent interest rate to its subscribers in 2016-17 and 8.55 per cent in 2017-18.
The interest rate was slightly higher at 8.8 per cent in 2015-16. It paid 8.75 per cent interest in 2013-14 as well as 2014-15, up from 8.5 per cent in 2012-13. The interest rate in 2011-12 was 8.25 per cent.
What is EPF?
EPF is a mandatory savings scheme under the Employees’ Provident Fund and Miscellaneous Provisions Act, 1952. It is managed under the aegis of Employees’ Provident Fund Organization (EPFO). It includes every establishment in which 20 or more persons are employed. The employee has to make a certain contribution to the provident fund and the same amount is paid by the employer on a monthly basis.
At the end of retirement or during service (under certain circumstances), the employee gets a lump sum amount along with interest on the PF contribution that accrues. Government data shows that around 4.9 crore new subscribers joined the Employees’ Provident Fund (EPF) scheme during the period from September 2017 to November 2021.
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