EPFO sets Employees’ Provident Fund interest rate at three-year high for 2023-24; Details here
Employees Provident Fund Organization (EPFO) has announced the highest level of three years Rate of interest 8.25% discount on Employees’ Provident Fund (EPF) deposits financial year 2023-24. This decision was taken by epfoThe highest decision making body is the Central Board of Trustees (cbt), during their meeting on Saturday. The interest rate for the last financial year, 2022-23, was raised marginally to 8.15% from 8.10% a year ago.
According to ET, the decision comes amid EPFO’s strong financial performance, investment in equities and minimal Covid-related withdrawals.
According to a PTI report, in 2021-22, EPFO had reduced the interest rate on EPF to a four-decade low of 8.1%, the lowest since 1977-78, when the interest rate was 8%.
However, an interest rate of 8.5% was provided for the financial year 2020-21. The interest rate for each financial year is decided by the CBT and then sent to the Finance Ministry for approval.
Once the government confirms the interest rate, it will be credited to the accounts of more than six crore EPFO subscribers. It is important to note that EPFO offers interest rates only after it is approved by the government through the Finance Ministry.
Over the years, the interest rates on EPF deposits have varied. In 2019-20, the interest rate was reduced to 8.5% from 8.65% in the previous financial year, the lowest in seven years. In 2016-17 and 2017-18, the interest rates provided were 8.65% and 8.55% respectively. In 2015-16 the rate was slightly higher at 8.8%. The interest rate in financial years 2013-14 and 2014-15 was 8.75%, which was higher than 8.5% provided in 2012-13. The interest rate in 2011-12 was 8.25%.
Once notified, the 8.25% interest rate will also be applicable on Voluntary Provident Fund (VPF) deposits. Additionally, exempted trusts are mandated to pay interest to their employees at the same rate as EPFO.
Employees’ Provident Fund (EPF) is mandatory for salaried employees in organizations with 20 or more employees. As per the EPF and MP Act, employees contribute 12% of their salary monthly to the EPF account, which is matched by the employer’s equal contribution.
While the entire employee contribution goes into the EPF account, only 3.67% of the employer’s share is deposited into the EPF account, with the remaining 8.33% allocated to the Employee Pension Scheme (EPS).
According to ET, the decision comes amid EPFO’s strong financial performance, investment in equities and minimal Covid-related withdrawals.
According to a PTI report, in 2021-22, EPFO had reduced the interest rate on EPF to a four-decade low of 8.1%, the lowest since 1977-78, when the interest rate was 8%.
However, an interest rate of 8.5% was provided for the financial year 2020-21. The interest rate for each financial year is decided by the CBT and then sent to the Finance Ministry for approval.
Once the government confirms the interest rate, it will be credited to the accounts of more than six crore EPFO subscribers. It is important to note that EPFO offers interest rates only after it is approved by the government through the Finance Ministry.
Over the years, the interest rates on EPF deposits have varied. In 2019-20, the interest rate was reduced to 8.5% from 8.65% in the previous financial year, the lowest in seven years. In 2016-17 and 2017-18, the interest rates provided were 8.65% and 8.55% respectively. In 2015-16 the rate was slightly higher at 8.8%. The interest rate in financial years 2013-14 and 2014-15 was 8.75%, which was higher than 8.5% provided in 2012-13. The interest rate in 2011-12 was 8.25%.
Once notified, the 8.25% interest rate will also be applicable on Voluntary Provident Fund (VPF) deposits. Additionally, exempted trusts are mandated to pay interest to their employees at the same rate as EPFO.
Employees’ Provident Fund (EPF) is mandatory for salaried employees in organizations with 20 or more employees. As per the EPF and MP Act, employees contribute 12% of their salary monthly to the EPF account, which is matched by the employer’s equal contribution.
While the entire employee contribution goes into the EPF account, only 3.67% of the employer’s share is deposited into the EPF account, with the remaining 8.33% allocated to the Employee Pension Scheme (EPS).
