In a good news for working professionals, the Employees' Provident Fund Organisation (EPFO) has announced a hike in the interest rate on the Employees’ Provident Fund (EPF). As per the decision, the EPFO has fixed an 8.25 percent interest rate on employees' provident fund for the 2023-24 financial year. This is a three-year high from the retirement fund body.
The hike in EPF interest rate was taken at the 235th meeting of the Central Board of Trustees.
Taking to his X handle, Union Minister Bhupender Yadav wrote, “The 235th meeting of Central Board of Trustees, EPFO, today has recommended 8.25 per cent as the rate of interest on Employees' Provident Fund deposits for 2023-24.”
According to Yadav, the move is a step towards fulfilling Prime Minister Narendra Modi’s guarantee of strengthening social security for India’s workforce.
In March 2023, the Employees' Provident Fund Organisation (EPFO) had increased the interest rate on EPF marginally to 8.15 per cent for 2022-23 from 8.10 per cent in 2021-22.
In March 2022, EPFO had lowered the interest on EPF for 2021-22 to an over four-decade low of 8.1 per cent for its over six crore subscribers, from 8.5 per cent in 2020-21.
This was the lowest since 1977-78, when the EPF interest rate stood at 8 per cent.
"The EPFO's apex decision making body Central Board of Trustees (CBT) has decided to provide 8.25 per cent rate of interest on EPF for 2023-24 at its meeting on Saturday," a source said.
The 8.5 per cent interest rate on EPF deposits for 2020-21 was decided by CBT in March 2021.
After the CBT's decision, the interest rate on EPF deposits for 2023-24 will be sent to Ministry of Finance for concurrence.
After the government's ratification, the interest rate on EPF for 2023-24 will be credited into accounts of over six crore subscribers of EPFO.
EPFO provides the rate of interest only after it is ratified by the government through the finance ministry.
In March 2020, EPFO had lowered the interest rate on provident fund deposits to a seven-year low of 8.5 per cent for 2019-20, from 8.65 per cent provided for 2018-19.
EPFO had provided 8.65 per cent interest rate to its subscribers in 2016-17 and 8.55 per cent in 2017-18. The rate of interest was slightly higher at 8.8 per cent in 2015-16.
The retirement fund body had given 8.75 per cent rate of interest in 2013-14 as well as 2014-15, higher than 8.5 per cent for 2012-13. The rate of interest was 8.25 per cent in 2011-12.
(WITH PTI Inputs)