The government can give a big shock to crores of members of EPFO ​​(Employee Provident Fund Organisation). The government can make a big announcement on Friday regarding the interest rate on EPFO. It is believed that the Central Board of Trustees of EPFO ​​can cut the interest on the money deposited in PF (Provident Fund). This can happen because the stock markets and bond yields have fallen, as well as EPFO ​​is facing more claim settlement.

Considering these reasons, the Central Board of Trustees of EPFO ​​may consider reducing the interest rate for the financial year 2024-25, which will affect the retirement savings of about 300 million (30 crore) EPFO ​​members.

The decision on interest rate will be taken tomorrow (28 February)

The board of EPFO ​​will meet on 28 February 2025 to decide on the interest rate on EPF (Employee Provident Fund). In this meeting, a big decision can be taken on the interest rate on the money deposited in EPF this year, which will directly affect the savings of crores of EPFO ​​members. Last year, the government increased the interest rate on EPF from 8.15 percent to 8.25 percent, but now it is believed that this time the interest rate may be reduced.

Why might interest rates be reduced?

According to a Business Standard report, the EPFO’s investment committee held a meeting last week to discuss the status of EPFO’s income and expenditure. Its purpose was to recommend the interest rate. According to the report, this time the interest rate may be lower than last year. The main reason for this is that bond yields have fallen in recent months. If the government announces a higher interest rate, the EPFO ​​will not have much money left for the retirement fund, as the retirement fund will not have excessive surplus.

Increasing demand for claim settlement

Apart from this, the demand for claim settlement has also increased significantly. The number of claim settlements done by EPFO ​​is increasing, leaving less pool (resources) for the interest to be received on the money deposited for EPF this year. As of January 2024, EPFO ​​has processed more than 5.08 million (50 lakh) claims worth ₹ 2.05 trillion (Rs 2.05 lakh crore). At the same time, more than 44.5 million (45 lakh) claims worth ₹ 1.82 trillion (Rs 1.82 lakh crore) were settled in 2023-24. Due to this increasing demand for claim settlement, EPFO ​​is facing a lot of pressure, which may affect the interest rate.

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The post EPF Interest Rate: Big news…! Government may announce a cut in PF interest rates, Know the reason here first appeared on Rightsofemployees.com.

The interest rate that was fixed for the last financial year i.e. 2021-22 was the lowest in 43 years. Last year, the interest rate on PF was reduced from 8.5 per cent to 8.1 per cent. There was no change in the rate of interest of PF in the financial year 2020-21. Just a year before this, the interest rate was reduced from 8.65 per cent to 8.5 per cent in 2019-20.

In March 2022, the CBDT i.e. Central Board of Trustees had recommended an interest rate of 8.1 per cent for over 6 crore active subscribers of EPFO ​​for the financial year 2021-22, leaving an estimated surplus of Rs 450 crore. According to sources, EPFO ​​can retain the current interest rate of 8.1 per cent. This can be done keeping in mind the potential for higher returns in equity investments.

The post PF account holders: Big news! PF interest rates for FY23 will be decided on this date first appeared on Rightsofemployees.com.