EPFO hikes interest rate on PF deposits to 8.15% for FY23
New Delhi, March 28
The Central Board of Employees’ Provident Fund Organisation (EPFO) headed by Union Labour Minister Bhupender Yadav on Tuesday marginally raised interest rate on employees’ provident fund (EPF) deposits to 8.15% for 2022-23 for its over six crore subscribers. It is an improvement of 0.05% over 8.1% interest rate for fiscal 2021-22, which was the lowest since 1977-78.
Marginally Up by 0.05%
- In March 2022, Employees’ Provident Fund Organisation (EPFO) had lowered the interest rate on EPF for 2021-22 to a four-decade low of 8.10% for its subscribers, from 8.5% in 2020-21
- This was the lowest since 1977-78, when the EPF interest rate stood at 8%
- The interest rate would be officially notified in the government gazette after approval by Ministry of Finance, following which EPFO would credit the rate of interest into subscribers’ accounts
The interest will be credited into the accounts of subscribers after it is officially notified in the Government gazette following its approval by the Finance Ministry. During 2022-23, the RBI had made six revisions to the baseline interest rate, hiking it by a cumulative 2.25% (225 basis points).
The ministry said the Board’s recommendation involves distribution of more than Rs 90,000 crore in the members’ account on total principal amount of Rs 11 lakh crore which was Rs 77,424.84 crore (interest) and Rs 9.56 lakh crore (principal), respectively in 2021-22.
With reports that EPFO holding is overleveraged in two Adani Group companies, the Labour Ministry sought to assure that it has followed “a blend of conservative yet progressive approach of investment followed by EPFO has made it a wise option for EPF members.”
Over the years, EPFO has distributed higher income to its members, through a “prudent and balanced approach” towards investment, putting the “highest emphasis on safety and preservation of principal with an approach of caution and growth,” said the statement.
“The total income recommended for being distributed is the highest to date. The growth in income and the principal amount is respectively more than 16% and 15% as compared to the financial year 2021-22,” it added. Separately, provisional payroll data showed an addition of 14.86 lakh net members in January. Among the newly joined members, the highest enrolment is registered in the age group of 18-25 years which constitutes 55.52% of the total of new members. As many as 3.54 lakh members exited the fold of EPFO, the lowest exit in the last four months.
