EPFO continues to give attractive interests rate compared to other government schemes
- EPFO has reduced interest rates to the lowest in more than 40 years for the current financial year.
- The government body has slashed interest rates to 8.1% from 8.5% in the previous fiscal year.
- Despite EPFO’s interest rates being the lowest in its history in decades, it is higher compared to many other government saving schemes currently.
AdvertisementThe popular retirement saving scheme followed by many corporations for its employees has slashed its interest rates to a 40-year low amid such a challenging environment.
On Saturday, the Employees' Provident Fund Organisation’s (EPFO) announced that it has recommended to reduce the interest rate of the retirement fund to 8.1% from 8.5% last year. The rate will now be approved by the Finance Ministry.
While this is reportedly the lowest interest rate by EPFO since 1977-78, it still offers the highest returns than many other government saving schemes and bank deposits.
Source: Department of Posts Ministry, Ministry of Communications
|Saving instruments||% interest rate|
|Employees Provident Fund||8.1%|
|Public Provident Fund Scheme||7.1%|
|Senior citizen savings scheme||7.4%|
|Sukanya Samriddhi Scheme||7.6%|
|Post Office time deposit (5 year)||6.7%|
|National Saving Certificate||6.8%|
Employees’ Provident Fund is a government retirement fund mandatory for employees earning up to ₹15,000 a month in firms with over 20 workers. Here the employee and the employer contribute to the EPF scheme on a monthly basis in equal proportions of 12% of the basic salary and dearness allowance.
K E Raghunathan, member of central board of trustees after announcing the reduction, reportedly said that it is understood that this is going to be the most unpredictable year because of the war and market conditions, among other things. Hence, the government body doesn’t want to overcommit with high rates.
|Fiscal year||EPF interest rate|
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