NEW DELHI: The Employees’ Provident Fund Organisation (EPFO) has fixed the interest rate on provident fund deposits at 8.5% for 2020-21 the same as last year.
The decision was taken at the 228th meeting of the Central Board of Trustees of the EPFO, held in Srinagar under the chairmanship of Santosh Kumar Gangwar, Union Minister of State for Labour & Employment.
“The Central Board recommended 8.50% annual rate of interest to be credited on EPF accumulations in members’ accounts for the financial year 2020-21. The interest rate would be officially notified in the government gazette following which EPFO would credit the rate of interest into the subscribers’ accounts,” the board said in a statement.
The decision came on the back of large withdrawals and fewer contributions throughout last year amid the coronavirus pandemic.
There were apprehension that the rate might be further reduced. Sources said the EPFO will be left with a surplus of Rs 300 crore after crediting an interest rate of 8.5% for FY21 to its six-crore subscribers.
In March 2020, EPFO had reduced the interest rate to 8.5% for 2019-20 — a seven-year low — from 8.65% in 2018-19.
Net new enrolments with the retirement fund body grew 24% to 1.25 million in December, indicating a return to the pre-Covid levels of subscriber growth for the EPFO, according to the payroll data released last Saturday.