EPFO’s Decision To Fix 8.25% Interest Rate – What it means for employees?
The Employees’ Provident Fund Organisation (EPFO) has announced that it will fix an interest rate of 8.25% on employees’ provident fund (EPF) deposits for the financial year 2023-24. This is the highest interest rate in three years, indicating positive news for EPFO subscribers.
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Earlier this year, in March 2023, EPFO had marginally increased the interest rate on EPF to 8.15% for the financial year 2022-23, compared to 8.10% in 2021-22. However, the previous year, in March 2022, EPFO had lowered the interest rate to a historic low of 8.1% for 2021-22, down from 8.5% in 2020-21. The interest rate in 2021-22 was the lowest since 1977-78 when it stood at 8%.
The decision to fix an interest rate of 8.25% on EPF for 2023-24 was made by the EPFO’s apex decision-making body, the Central Board of Trustees (CBT). The rate will now be sent to the Ministry of Finance for concurrence. Once the government gives its approval, the interest rate will be credited to the accounts of over six crore EPFO subscribers.
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It is important to note that EPFO can announce the rate of interest only after it is ratified by the government through the finance ministry. Back in 2020, EPFO had lowered the interest rate to 8.5% for 2019-20, down from 8.65% in 2018-19, marking a seven-year low.
In conclusion, the decision to fix an interest rate of 8.25% on EPF for the financial year 2023-24 is a positive development for EPFO subscribers. It indicates a slight improvement compared to the previous year and offers some relief to individuals planning for their retirement.
