Government approves EPF interest rate of 8.1% for 2021-22
The Employees Provident Fund Organization (EPFO) will soon begin crediting an interest rate of 8.1% for 2021-22 to its members as the Ministry of Finance has ratified the rate proposed by the body. pension fund in March.
In March, the Central Board of Trustees (CBT), EPFO’s highest decision-making body, decided to lower interest on provident fund deposits for 2021-22 to a low in more than four decades of 8.1% for his almost 65 years. million subscribers. This was the ETH’s lowest interest rate since 1977-78, when it stood at 8%, but still higher than the returns small savers could earn under any other fixed income plan.
For 2020-21, the ETH interest rate has been set at 8.5%, as in the previous year.
“The Ministry of Labor and Employment, Government of India, has conveyed Central Government approval to credit interest @ 8.1% for the year 2021-22 to the account of each member of the EPF Scheme. Accordingly, you are requested to issue necessary instructions to all concerned to credit the said interest rate to members’ accounts,” Additional Central PF (Investment) Commissioner Abhay Ranjan said in a note to Heads of Offices. EPFO’s zonal and regional offices.
In accordance with practice, the rate proposed by the CBT must be ratified by the Ministry of Finance before it is credited to the individual accounts of the Employees Provident Fund (EPF), even if the EPFO pays the interest on its own income without depending on the chessboard.
Ratification came fairly early for 2021-22. For 2020-21, he arrived towards the end of October 2021.
KE Raghunathan, a CBT member representing employers on the tripartite body, praised the speed with which the interest rate for 2021-22 was approved by the government.
“It’s really appreciable considering the desperate need for funds in the hands of the employees and additionally, it will certainly help them with expenses such as the educational needs of their children,” he said.
At 8.1%, EPFO will have to pay around Rs 76,000 crore in interest to its subscribers for 2021-22, which will allow it to have a marginal surplus of Rs 450 crore. EPFO now receives more than Rs 2.1 trillion as annual subscription and invests its accumulated corpus – around Rs 18 trillion now – in debt and equity instruments in the ratio 85:15.