{"id":29515,"date":"2020-03-09T10:19:17","date_gmt":"2020-03-09T04:49:17","guid":{"rendered":"https:\/\/enterslice.com\/learning\/?p=29515"},"modified":"2020-03-12T17:54:19","modified_gmt":"2020-03-12T12:24:19","slug":"epf-interest-rate-slashed-by-15bps-to-8-5-know-the-full-story","status":"publish","type":"post","link":"https:\/\/enterslice.com\/learning\/epf-interest-rate-slashed-by-15bps-to-8-5-know-the-full-story\/","title":{"rendered":"EPF Interest Rate slashed by 15bps to 8.5% &#8211; Know the full story"},"content":{"rendered":"<p class=\"has-drop-cap\">The trustees of the Retirement fund body EPFO or Employees&rsquo; Provident Fund Organisation fixed the interest rate on Provident Fund (PF) deposits for 2019-20 to a seven-year low at 8.5%. More than six crore subscribers will be impacted by this move, which will enable the <a href=\"https:\/\/enterslice.com\/epf-registration\">Employees Provident Fund<\/a> Organisation to have a surplus of over Rs 700 crore. The EPF interest rate was provided at 8.65 percent for 2018-2019. The interest income of the Employee Provident Fund Organisation in the current year is pegged at Rs 58,500 crore in addition to the notional income of Rs 2,500 crore from investments in exchange-traded funds in 2016.<\/p>\n\n\n\n<div class=\"shadow4\"><strong>The board also approved the proposal to empanel the Jammu and Kashmir Bank for collection of Employee Provident Fund dues in Jammu and Kashmir.<\/strong><\/div>\n\n\n\n<h2 class=\"wp-block-heading\">What is EPF or Employees&rsquo; Provident Fund?<\/h2>\n\n\n\n<p><em>The Employees&rsquo; Provident Fund or EPF is a savings scheme prescribed under the Employees&rsquo; Provident Fund and Miscellaneous Act, 1952<\/em>. It is managed and regulated by the Central Board of Trustees (CBT) that consists of representatives from three parties:<\/p>\n\n\n\n<ul><li>The government, <\/li><li>The employers,<\/li><li>The employees. <\/li><\/ul>\n\n\n\n<p>The Employees&rsquo; Provident\nFund Organisation (EPFO) assists the CBT in its activities. EPFO functions\nunder the jurisdiction of the government and is managed by the Ministry of\nLabour and Employment.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Employee Provident Fund or EPF Interest Rate\nin Different Years<\/h2>\n\n\n\n<table class=\"wp-block-table\"><tbody><tr><td>\n  S.No<strong><\/strong>\n  <\/td><td>\n  Financial Year\n  &nbsp;\n  <\/td><td>\n  Rate of Interest in %\n  <\/td><\/tr><tr><td>\n  1.\n  <\/td><td>\n  2014-2015\n  <\/td><td>\n  8.75%\n  &nbsp;\n  <\/td><\/tr><tr><td>\n  2.\n  <\/td><td>\n  2015-2016\n  <\/td><td>\n  8.8%\n  &nbsp;\n  <\/td><\/tr><tr><td>\n  3.\n  <\/td><td>\n  2016-2017\n  <\/td><td>\n  8.65%\n  &nbsp;\n  <\/td><\/tr><tr><td>\n  4.\n  <\/td><td>\n  2017-2018\n  <\/td><td>\n  8.55%\n  &nbsp;\n  <\/td><\/tr><tr><td>\n  5.\n  <\/td><td>\n  2018-19\n  <\/td><td>\n  8.65%\n  <\/td><\/tr><tr><td>\n  6.\n  <\/td><td>\n  2019-20\n  <\/td><td>   8.5%   <\/td><\/tr><\/tbody><\/table>\n\n\n\n<h2 class=\"wp-block-heading\">Comparison of EPF Interest Rate on other Saving Schemes<\/h2>\n\n\n\n<ul><li>&nbsp;EPFO at the rate of 8.5% will fetch better returns than many small\nsaving schemes introduced by government.<\/li><\/ul>\n\n\n\n<p><strong><em>Different saving schemes and their interest rates are mentioned below:<\/em><\/strong><\/p>\n\n\n\n<table class=\"wp-block-table\"><tbody><tr><td>\n  Government\n  Saving Schemes\n  &nbsp;\n  <\/td><td>\n  Interest\n  Rates\n  <\/td><\/tr><tr><td>\n  Monthly Income Account\n  &nbsp;\n  <\/td><td>\n  7.6%\n  <\/td><\/tr><tr><td>\n  National\n  Savings Certificate\n  <\/td><td>\n  7.9%\n  &nbsp;\n  <\/td><\/tr><tr><td>\n  Public\n  Provident Fund\n  &nbsp;\n  <\/td><td>\n  7.9%\n  <\/td><\/tr><tr><td>\n  Kisan\n  Vikas Patra\n  <\/td><td>\n  7.6%\n  &nbsp;\n  <\/td><\/tr><tr><td>\n  Sukanya\n  Samriddhi Account Scheme\n  &nbsp;\n  <\/td><td>\n  8.4%\n  <\/td><\/tr><tr><td>\n  Senior\n  Citizen Saving&rsquo;s Scheme\n  &nbsp;\n  <\/td><td>\n  8.6%\n  <\/td><\/tr><\/tbody><\/table>\n\n\n\n<p>Only Senior Citizen Savings&rsquo; Scheme provides higher\nreturns than the EPF Scheme.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">How will the EPF interest rate cut affect salaried employees?<\/h2>\n\n\n\n<p>Salaried\nemployees who invest in employee provident funds will receive 0.15 per cent\nlesser returns on the amount they deposit in this fiscal year as compared to\nlast year. Last year&rsquo;s interest rates were 8.65 per cent.<\/p>\n\n\n\n<p>However,\neven at 8.5 per cent, the interest rate is higher than the interest rate for\nsmall savings. As per the experts, the subscribers may not lose too much of the\nreturns in interest.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Approval needed for the implementation of new EPF Interest Rate from the\nFinance Ministry<\/h2>\n\n\n\n<p>EPFO manages a\ncollection of over&nbsp;Rs.12 trillion and every\nyear; it has a fresh corpus of around Rs.1.46\ntrillion. From its annual deposits, the fund manager invests approximately 15%\nin equity and the rest in debt instruments, including the government and\ncorporate bonds.<\/p>\n\n\n\n<p>Before implementing the new rate the CBT decision needs formal approval from the finance ministry. Though this approval is just a formality, the Finance Ministry has the power to question the interest rate announced by the Employee Provident Fund Organisation. The 2018-2019 EPF interest rates had faced tough questions. Still, the Finance Ministry approved the move almost after seven months of its announcement. Hence it is expected that the Finance Ministry will approve the EPF interest rate for the year 2019-2020.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Other Ratification is done by Employee Provident Fund Organisation<\/h2>\n\n\n\n<p>The Employee Provident Fund Organisation or EPFO also\nratified and appreciated the restoration of normal pension after fifteen years\nfrom the date of commutation. This will benefit about 6,30,000 pensioners who\nin the past had opted for partial withdrawal on or before 25<sup>th<\/sup>\nSeptember 2009. <\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Statements Regarding the new EPF Interest Rates <\/h2>\n\n\n\n<p>According to Bharatiya Mazdoor Sangh which is an affiliate of the Rashtriya Swayamsevak Sangh said that they had protested against the reduction in EPF interest rate. Still, due to the non-availability of new income generation, the finance committee suggested for only 8.5%. <\/p>\n\n\n\n<p>As per K. Padmanabhan, vice president of the Centre for Indian Trade Unions (CITU) and also a member of the CBT said that the no agenda was shared by the EPFO officials related to the&nbsp; EPF interest rate. He also said the CBT officials had a pre-decided rate. <\/p>\n\n\n\n<p>K.E. Raghunathan an\nanother CBT member representing its employers said that 8.5% rate is far better\nthan most other investments, and the minister decided to pay 8.5% as against\n8.45% suggested by the investment committee of the fund manager.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Key Points<\/h2>\n\n\n\n<ul><li>The new EPF interest rate is 15 bps below the\nfigure of the previous fiscal year, affecting the earnings of over 60 million\nsubscribers.<\/li><li>Even after paying 8.5 % interest, the Employee\nProvident Fund will have a surplus of Rs. 700 crore as specified by Santosh\nGangwar, labour Minister.<\/li><li>The EPF interest rate announced for the current\nfiscal year is lowest since 2012-2013 when it was around 8.5%.<\/li><li>Ratification of restoration of regular pension\nis announced by the CBT after 15 years from the date of the commutation,\nbenefitting 6.3 lakh pensioners, who opted for compensation on or before 25<sup>th<\/sup>\nof September, 2008.<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\">Takeaway<\/h2>\n\n\n\n<p>The Employee Provident Fund scheme aims at\npromoting savings which can be used post-retirement by various employees all\nover the country. The amount of interest received on the deposit along with the\ntotal accumulated amount is totally tax-free. The interest earned on the\nEmployees&rsquo; Provident Fund account is calculated depending on the rate decided\nby the Central Board of Trustees along with the Finance Minister. The interest\nrate of 8.5% on EPF will be applicable from the Financial Year 2019-20.<\/p>\n\n\n\n<div class=\"read\"><p><b>Also, Read:<\/b> <mark><a href=\"https:\/\/enterslice.com\/learning\/employee-provident-fund-epf-registration-procedure\/\" target=\"_blank\" rel=\"noopener noreferrer\">Employee Provident Fund Registration Procedure\n<\/a><\/mark>.<\/p><\/div>\n","protected":false},"excerpt":{"rendered":"<p>The trustees of the Retirement fund body EPFO or Employees&rsquo; Provident Fund Organisation fixed the interest rate on Provident Fund (PF) deposits for 2019-20 to a seven-year low at 8.5%. More than six crore subscribers will be impacted by this move, which will enable the Employees Provident Fund Organisation to have a surplus of over [&hellip;]<\/p>\n","protected":false},"author":27,"featured_media":29517,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":[],"categories":[1501],"tags":[],"acf":{"service_id":"281"},"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v14.6.1 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>EPF Interest Rate slashed by 15bps to 8.5% - Read Full Story<\/title>\n<meta name=\"description\" content=\"The 2018-2019 EPF interest rates had faced tough questions. Read about EPF interest rate &amp; Comparison of EPF Interest Rate on other Saving Schemes.\" \/>\n<meta name=\"robots\" content=\"index, follow\" \/>\n<meta name=\"googlebot\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<meta name=\"bingbot\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/enterslice.com\/learning\/epf-interest-rate-slashed-by-15bps-to-8-5-know-the-full-story\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"EPF Interest Rate slashed by 15bps to 8.5% - Read Full Story\" \/>\n<meta property=\"og:description\" content=\"The 2018-2019 EPF interest rates had faced tough questions. Read about EPF interest rate &amp; Comparison of EPF Interest Rate on other Saving Schemes.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/enterslice.com\/learning\/epf-interest-rate-slashed-by-15bps-to-8-5-know-the-full-story\/\" \/>\n<meta property=\"og:site_name\" content=\"Enterslice\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/enterslice\" \/>\n<meta property=\"article:published_time\" content=\"2020-03-09T04:49:17+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2020-03-12T12:24:19+00:00\" \/>\n<meta property=\"og:image\" content=\"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2020\/03\/EPF-Interest-Rate-slashed-by-15bps-to-8.jpg\" \/>\n\t<meta property=\"og:image:width\" content=\"670\" \/>\n\t<meta property=\"og:image:height\" content=\"352\" \/>\n<meta name=\"twitter:card\" content=\"summary\" \/>\n<meta name=\"twitter:creator\" content=\"@enterslice\" \/>\n<meta name=\"twitter:site\" content=\"@enterslice\" \/>\n<!-- \/ Yoast SEO plugin. -->","authorName":"Deepti Shikha","authorImageUrl":"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2020\/01\/Deepti-Shikha.jpg","authorDescription":"Deepti is a Law graduate with an avid interest in reading and very proficient in summarizing legal cases. She has enough experience in handling legal affairs of the company. In the initial days of her career, she has worked as a legal researcher and has 3+ years of experience.","postViews":445,"readingTime":4,"nextPost":{"id":29521,"slug":"mca-notifies-company-amendment-rules-2020-for-independent-director"},"prevPost":{"id":29507,"slug":"nbfc-things-to-know-before-incorporating-this-financial-institution"},"featuredMediaUrl":"https:\/\/enterslice.com\/learning\/wp-content\/uploads\/2020\/03\/EPF-Interest-Rate-slashed-by-15bps-to-8.jpg","postTerms":"Government Registration","_links":{"self":[{"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/posts\/29515"}],"collection":[{"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/users\/27"}],"replies":[{"embeddable":true,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/comments?post=29515"}],"version-history":[{"count":0,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/posts\/29515\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/media\/29517"}],"wp:attachment":[{"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/media?parent=29515"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/categories?post=29515"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/enterslice.com\/learning\/wp-json\/wp\/v2\/tags?post=29515"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}