Published On: Thu, Feb 21st, 2019

Interest rate on PF deposits hiked

Provident fund for fiscal year 2018-19 has been slightly hiked from 8.55 percent to 8.65 percent, said labor minister Santosh Gangwar on Thursday.

Interest rate, PF

Currently there are five crore subscribers to Employees’ Provident Fund Organization and hiked interest payout will leave a surplus of Rs 151.67 crore for the 2018=19 fiscal year. In the fiscal year 2017-18 the surplus was Rs 586 crore.

Without the hike the surplus would have been at Rs 771.37 crore for fiscal year 2018-19. If the interest rate was increased to 8.70 percent, a deficit of Rs 158 crore could have been seen.

Even though hike in interest rate means good news to PF contributors but the timing is not very favorable as RBI is lately moving the interest rates towards downward direction. The latest move was cut of 25 basis points in repo rate.

However, currently the rate offered by EPFO is higher than most of the small saving schemes. In 2012-13 it was at 8.5 percent and in 2013-14 the rate was at 8.75 percent. The same was in 2014-15 too.

In the fiscal year 2015-16 the interest rate was 8.8 percent while in 2016-17 it was at 8.65 percent.

In 2017-18 the interest rate was lowest in five years at 8.55 percent.

The proposal is yet to be approved by Finance Ministry. Following the approval the interest rate will be credited into the accounts of subscribers.

About the Author

- Paul Linus is an eminent online journalist who has been writing news, features and editorials on different websites from across the world for about a decade. He can be contacted at knowledgeherald@gmail.com

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