PF Interest Rate: The Modi government has approved keeping the EPF interest rate 8.1 for 2021-22. Till now it was 8.5 percent, which has now been reduced to 8.1 percent. Interestingly, this rate is the lowest in the last 40 years. Experts were already speculating that it may decline.
In the EPF meeting held in the month of March before Holi, it was decided to reduce the PF interest rate. Earlier it was 8.5 percent, which has now been reduced to 8.1 percent. This rate is the lowest in the last four decades i.e. 40 years. Now the government has also approved keeping the interest rate on EPF at 8.1 percent for 2021-22.
In 1977-78, the EPFO had given an interest of 8 per cent. Since then it has been 8.25 per cent or more. The two-day meeting of EPFO started on Friday, March 11, which ended on March 12, in which it was decided to reduce the interest rate of EPF.
The EPFO had fixed 8.5 percent interest in the financial year 2020-21 and in the previous financial year. Earlier in 2018-19, 8.65 percent interest was given on EPFO. EPFO had paid 8.65 per cent interest in 2016-17 and 2017-18 also. At the same time, the interest rate was 8.8 percent in 2015-16, 8.75 percent in 2013-14 and 2014-15 also.
After getting approval from the government, EPFO will now start adding interest amount to the EPF accounts of the employees. According to the EPFO office order issued on Friday, the Ministry of Labor and Employment has informed about the approval of 8.1 percent interest to EPFO subscribers for 2021-22. The Labor Ministry had sent this proposal to the Finance Ministry for approval.
Trustee KE Raghunathan, who represents the employees in the CBT, said the speed with which the labor and finance ministries have approved the rate of interest, given the need for funds to the employees, is indeed commendable. This will help them to meet the education and other needs of their children.