Good News: Private Sector Employees Soon to Get 8.5% Interest on Their Provident Fund Savings

New Delhi: Here comes a piece of good news for subscribers of Employees’ Provident Fund (EPF) for they are likely to get the entire 8.5% declared interest rate for FY2019-20 at one go as  Employees’ Provident Fund Organisation (EPFO) has been able to sell its equity holdings and earn higher-than-expected returns in December due to the market rally. Also Read – EPFO Eases Deadline For Pensioners to Submit Their Life Certificate Till February 28, 2021

This leaves the EPFO with double the surplus projected three months back. According to reports, the Union labour and employment ministry has written to the finance ministry, seeking 8.5% interest to be credited into around 190 million EPF accounts for 2019-20. Also Read – Jeevan Praman Patra: EPFO Offers Pensioners Multiple Options to Submit Digital Life Certificates During Pandemic

“The recommendation is pending approval of the finance ministry which is expected to come within a week. The labour ministry has proposed to notify the interest rate at one go now,” a news publication quoted a top government official as saying. Also Read – EPFO Subscribes Can Opt For This Easy & Speedy Route For Redressal of Grievances | Read on

Moreover, the Central Board of Trustees (CBT) on September 9 had approved the PF interest rate of 8.5 per cent for subscribers but said it would be paid in two tranches – 8.15 percent and 0.35 percent.

The EPFO invests up to 15% of its incremental corpus in ETFs. The development comes as in FY20, the EPFO’s equity investments accrued a return of minus 8.3%, down from 14.7% in FY19. However, due to the sharp rebound witnessed in equity markets in October, November and December so far, EPFO has been able to liquidate its equity investments at profit.