Some good news, PF rates revised

The Employees Provident Fund Organisation (EPFO) has fixed the interest rate at 8.15% for financial year 2022-23, PTI reported citing a source.

The decision was taken at the meeting held on Tuesday. "The Employees' Provident Fund Organisation's apex decision-making body Central Board of Trustees (CBT) has decided to provide 8.15 per cent rate of interest on EPF for 2022-23 at its meeting on Tuesday," a source told the news agency.

Last year, The EPFO had lowered the interest on EPF for 2021-22 to an over four-decade low of 8.1 per cent for its about five crore subscribers, from 8.5 per cent in 2020-21.

However, the Central Board Trustees (CBT) EPF, in a statement, said the interest rate would be officially notified in the government gazette after approval of Ministry of Finance, following which EPFO would credit the rate of interest into its subscribers' accounts.

This was the lowest since 1977-78, when the EPF interest rate stood at 8 per cent.

The 8.5 per cent interest rate on EPF deposits for 2020-21 was decided by CBT in March 2021.

After the CBT's decision, the interest rate on EPF deposits for 2022-23 will be sent to Ministry of Finance for concurrence.

After the government's ratification, the interest rate on EPF for 2022-23 will be credited into accounts of over five crore subscribers of EPFO.

EPFO provides the rate of interest only after it is ratified by the government through the finance ministry.

In March 2020, EPFO had lowered the interest rate on provident fund deposits to a seven-year low of 8.5 per cent for 2019-20, from 8.65 per cent provided for 2018-19.

EPFO had provided 8.65 per cent interest rate to its subscribers in 2016-17 and 8.55 per cent in 2017-18. The rate of interest was slightly higher at 8.8 per cent in 2015-16.

The retirement fund body had given 8.75 per cent rate of interest in 2013-14 as well as 2014-15, higher than 8.5 per cent for 2012-13.

The rate of interest was 8.25 per cent in 2011-12.

"EPFO over the years has been able to distribute higher income to its members, through various economic cycles with minimal credit risk. Considering the credit profile of the EPFO investment, the interest rate of EPFO is higher than other comparable investment avenues available for subscribers. EPFO has consistently followed a prudent and balanced approach towards investment, putting highest emphasis on the safety and preservation of principal with an approach of caution and growth," the statement added.

EPFO being one of the largest social security organisation has been maintaining and providing its subscribers with a high assured interest rate even during periods of volatility in equity and capital markets. A blend of the conservative yet progressive approaches of investment followed by EPFO has made it a wise option for PF members.