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EPF Board recommends 8.5% interest rate

The rate of 8.5% stays the bottom since 2012-2013, nevertheless, the EPFO mentioned it was greater in comparison with different investments

The Central Board of Trustees of the Employees Provident Fund Organisation (EPFO) on Thursday beneficial that subscribers be given 8.5% interest rate for PF contributions for 2020-2021, preserving the identical rate because the earlier 12 months.

At a gathering in Srinagar, the board, chaired by Labour and Employment Minister Santosh Kumar Gangwar, “recommended 8.50% annual rate of interest to be credited on EPF accumulations in members’ accounts for the financial year 2020-21,” an announcement by EPFO mentioned.

“The interest rate would be officially notified in the government gazette following which EPFO would credit the rate of interest into the subscribers’ accounts,” it mentioned.

The rate of 8.5% stays the bottom since 2012-2013, nevertheless, the EPFO mentioned it was greater in comparison with different investments.

“EPFO over the years has been able to distribute higher income to its members, through various economic cycles with minimal credit risk. Considering the high credit profile of the EPFO investment, the interest rate of EPFO is considerably higher than other comparable investments avenues available for subscribers,” it mentioned.

The EPFO mentioned it had determined to liquidate funding in fairness by way of alternate traded funds, which it had began in 2015-2016. It added that the interest rate beneficial was a results of the earnings from interest from debt funding and earnings from fairness funding.

“This has enabled EPFO to provide higher return to its subscribers and still allowing EPFO with healthy surplus to act as cushion for providing higher return in future also. There is no over-drawl on EPFO corpus due to this income distribution,” it mentioned.

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