Employee Provident Fund (PF) Interest Rate Hiked Marginally To 8.15%

Retirement fund body EPFO has marginally increased the interest rate to 8.15% for the current financial year from 8.1% in the previous year.

The interest rate last year was the lowest in 40 years.

"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," the Ministry of Labour and Employment said in a statement on Tuesday.

The 8.15% interest rate for 2022-23 was recommended after a meeting between the labour ministry and the central board of trustees of the Employees' Provident Fund Organisation (EPFO).

"The recommended rate of interest of 8.15% safeguards the surplus as well as guarantees increased income to members," the labour ministry said.

"The Board's recommendation involves distribution of more than Rs. 90,000 crores in the members' account on the total principal amount of about Rs 11 lakh crores which was Rs 77,424.84 crores and Rs 9.56 lakh crores respectively in the FY 2021-22. The total income recommended for being distributed is highest till date. The growth in income and the principal amount is respectively more than 16% and 15% as compared to last financial year 2021-22,"it added.

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.