Amidst the falling interest rate, the EPFO manages to hold 8.5% interest rate. On Thursday, the Employee’s Provident Fund Organisation has decided to offer 8.5% rate of interest on provident fund deposit for the financial year 2020-21. Nearly, five crores of active subscribers will be benefited from this undertaking.
Also, the government’s move to a tax return can hit many subscribers if their contribution is more than Rs 2.5 lakh annually. A meeting headed by the Union Labour Minister Santosh Gangwar proposed this decision. The finance ministry endorsed it, which is known to raise the red flag almost every year before holding itself back.
However, it is expected to earn a lump sum of ₹70,000 crores in the year to 31 March. It includes over ₹4,000 crores from its investments in funds. EPFO paid 8.5% to salaried members in the year 2020 and managed to offer the same in 2021.
“The interest rate for provident fund offered is a result of combined income that includes interest received from debt investments and income realized from equity investments” as per the retirement fund body. “It enables EPFO to offer higher returns to salaried subscribers and still offers the equal rate of interest “.
The 8.5% EPFO interest rate relates positively with other provident funds like savings schemes like the public provident fund (7.1%) and the national savings certificate (6.8%), and the general provident fund (GPF).