From April 1, Government employees and defence personnel will earn less from the General Provident Fund (GPF), as the interest rate has been brought down to 8.7 per cent from 8.8 per cent last year.
“During the year 2013-14, accumulations at the credit of subscribers to the General Provident Fund and other similar funds shall carry interest at the rate of 8.7 per cent per annum,” the Finance Ministry has said.
The revised rate will be applicable for 10 types of funds, which includes The General Provident Fund (Central Services), the Contributory Provident Fund (India), the All India Services Provident Fund, the State Railway Provident Fund, the General Provident Fund (Defence Services), the Indian Ordnance Department Provident Fund, the Indian Ordnance Factories Workmen’s Provident Fund, the Indian Naval Dockyard Workmen’s Provident Fund, the Defence Services Officers Provident Fund and the Armed Forces Personnel Provident Fund.
The interest rate on GPF is usually fixed on the basis of the average of yield on Government securities of similar maturity.
This rate was eight per cent till November 2011. It was then raised to 8.6 per cent for the period December 1, 2011 to March 31, 2012. It was hiked further to 8.8 per cent with effect from April 1, 2012.
The latest reduction of interest rate on GPF is in line with lowering of rates on small savings such as the National Saving Certificates and Public Provident Fund.