EPFO rate hiked to 8.65% from 8.55%

New Delhi, Feb 21: The employees' provident fund interest rate was on Thursday hiked from 8.55 percent to 8.65 percent or the 2018-19 fiscal year. The Employees' Provident Fund Organisation (EPFO) on Thursday made this announcement.

The announcement was made by Union Labour Minister Santosh Gangwar who said that it would benefit around 6 crore subscribers of the retirement fund body, said reports.

The interest rate on PF deposits for 2015-16 was 8.8 per cent while it was 8.75 per cent for 2013-14 and 2014-15. During 2012-13, the EPFO had offered the interest rate of 8.5 per cent.

Employee Provident Fund (EPF) is an integral source of an employee's savings. It is more important for an employee to get the timely receipt of requisite information about his EPF balance which helps him/her in planning for any major expenses either by withdrawing from EPF or by availing a loan against the EPF balance.

The Central Board of Trustees (CBT) headed by Labour Minister is the apex decision making body of the EPFO which finalises rate of interest on PF deposits for a financial year.

Once approved by the CBT, the proposal requires the concurrence of the Finance Ministry. The interest rate is credited into the subscribers account after the Finance Ministry's approval.

Recent changes in EPFO withdrawal rules:

There were some changes in the rules governing withdrawal of amount from Provident Fund. Employees' Provident Fund Organisation (EPFO) last year in June tweeted that existing provision of complete withdrawal after two months of unemployment remains unchanged.

Among other changes in rules, a PF account holder will now be able to withdraw upto 75 percent of outstanding balance from their PF accounts if they have been unemployed for more than a month. Till then, the account holders could withdraw the accumulated funds in Provident Fund account only after two months of unemployment and settle the account in one go.

Under the new provision of allowing 75 percent withdrawal after a month of unemployment, the EPFO member can still keep the account active. The remaning 25% can be withdrawn if the PF account holder continues to remain unemployed for over two months.