According to news agency PTI on Saturday, the Employees' Provident Fund Organisation (EPFO), Central Board of Trustees (CBT) has set an interest rate of 8.25% for EPF accounts year 2023–2024. The Employee Provident Fund (EPF) announced on March 28, of last year, that the interest rate for accounts for 2022–2023 would be 8.15%. In FY22, the EPFO had credited 8.10%.
The Central Board of Trustees, EPFO, at its 235th meeting today suggested an interest rate of 8.25 percent on deposits made into the Employees' Provident Fund for the years 2023–2024.Union Cabinet Minister for Labour & Employment Bhupender Yadav stated, "The move is a step towards fulfilling PM Shri @narendramodi ji's guarantee of strengthening social security for India's workforce." All employees who receive a salary are required to contribute to the Employees Provident Fund. Additionally, employers must fund the EPF account with a matching contribution. The retirement fund managed by the state has more than 60 million members.
Employees fund their EPF account with 12% of their monthly wages; the full amount is deposited into the account. Employers only contribute 3.67% to the Employees' Provident Fund (EPF) account; the remaining 8.33% is allotted to the Employees Pension Scheme (EPS). Additionally, the employer makes a 0.50% contribution to the employee's Employees' Deposit Linked Insurance (EDLI) account.
The Central Board of Trustees of EPFO reviews the interest rate of the EPF annually following consultation with the Ministry of Finance. After accounting for the suggested rate, the Union Finance Ministry announces the final interest rate.
Although interest is computed monthly, it is only paid to the Employees' Provident Fund account once a year, on March 31 of the applicable fiscal year. The interest rate is determined using the monthly closing balance for each month and then for the entire fiscal year when the EPFO announces the interest rate for the year. After interest was credited to member accounts, a net revenue of Rs 90,497.57 crore was expected to be left over for distribution last year, leaving a surplus of Rs 663.91 crore.
The Labour Ministry requested in July of last year that the CBT refrain from revealing the interest rate for 2023–2024 without first obtaining Ministry of Finance clearance. Since FY24 is an election year, it was previously reported that the Central Board of Trustees (CBT) will approve an interest rate of roughly 8%.
Between 8.80% and 8.10% has been the range of the EPF interest rate since the Narendra Modi-led government entered office in 2014. In 2016–17 and 2017–18, EPFO offered its customers an interest rate of 8.55% and 8.55%, respectively. In 2015–16, the interest rate increased somewhat to 8.8%.
The interest rate on provident fund deposits was reduced by EPFO in March 2020 from 8.65 percent for 2018–19 to a seven-year low of 8.5 percent for 2019–20. CBT determined in March 2021 that the interest rate on EPF deposits year 2020–21 will be 8.5%.
