Over 4.72 crore EPFO subscribers will get relief as the notification has been issued this week for the rates reduction.
As compared to banks that are offering 9 % -9.5 %, the returns on EPF are better due to the annual contribution and the interest on the balance are tax free.
Last year, employee unions had demanded the EPFO to maintain the interest rate at 9.5% in the current fiscal although based on the government entity funds that had proposed 8.25% payout.
According to the EPFO investment committee, there would be a deficit of Rs 24 lakh even at 8.25 %. While the representatives of employers had suggested that 8.5% could be paid this year.