10 Feb, 2024 01:29 PM

EPFO Sets Three-Year High Interest Rate at 8.25% for PF Deposits

EPFO Sets Three-Year High Interest Rate at 8.25% for PF Deposits

In a recent development, the Employees’ Provident Fund Organisation (EPFO) has announced a substantial interest rate of 8.25 per cent on employees’ provident fund (EPF) deposits for the fiscal year 2023-24. This decision marks a significant increase, reaching a three-year high.

According to sources, the apex decision-making body of EPFO, the Central Board of Trustees (CBT), made this determination during its meeting on Saturday. The decision awaits concurrence from the Ministry of Finance before it can be implemented.

Upon receiving approval from the government, the interest rate for the fiscal year 2023-24 will be credited into the accounts of more than six crore EPFO subscribers across the nation.

EPFO's practice dictates that the interest rate is finalized only after government ratification, facilitated through the Ministry of Finance.

A look back at previous years reveals a fluctuating trend in EPF interest rates. In March 2023, the EPFO marginally increased the interest rate to 8.15 per cent for the fiscal year 2022-23, up from 8.10 per cent in the previous year. However, in March 2022, the interest rate hit a four-decade low at 8.1 per cent for the fiscal year 2021-22, a significant drop from 8.5 per cent in 2020-21.

This marked the lowest rate since 1977-78 when the interest rate stood at 8 per cent. Notably, the interest rate for 2020-21 was decided at 8.5 per cent in March 2021.

Further retrospection shows that in March 2020, the EPFO reduced the interest rate to a seven-year low of 8.5 per cent for the fiscal year 2019-20, down from 8.65 per cent in 2018-19.

EPFO has historically offered varying interest rates, with rates at 8.65 per cent in 2016-17, 8.55 per cent in 2017-18, and a slightly higher rate of 8.8 per cent in 2015-16.

The retirement fund body provided an interest rate of 8.75 per cent in both 2013-14 and 2014-15, surpassing the 8.5 per cent rate in 2012-13. In 2011-12, the interest rate was set at 8.25 per cent.

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