The government has no proposal to reconsider the approved rate of interest of 8.1 per cent on Employees’ Provident Fund deposits for the year 2021-22.
“The Central Board of Trustees, EPF had recommended 8.1 per cent rate of interest on EPF for the financial year 2021-22, which has been approved by the government,” Minister of State for Labour and Employment Rameshwar Teli informed the Rajya Sabha on Thursday.
He further said this rate of interest is in fact higher than other comparable schemes including General Provident Fund (7.1 per cent), Senior Citizens Savings Scheme (7.4 per cent) and Sukanya Samriddhi Account Scheme (7.6 per cent).
The minister was responding to an unstarred question by Rajya Sabha MPs Vaiko and M Shanmugam on lowering of interest on EPF deposits.
In his reply, Teli said the rate of interest on EPF is dependent on the income received by the EPF from its investments and such incomes are distributed only in accordance with the EPF Scheme, 1952.
“As per the provisions of Paragraph 60(1) of the Employees’ Provident Fund (EPF) Scheme, 1952, Employees’ Provident Fund Organisation (EPFO) shall credit to the account of each member interest at such rate as may be determined by the Central Government in consultation with the CBT, EPF,” he further said.
Based on the CBT’s recommendation, the Centre had in June this year approved the interest rate of 8.1 per cent on PF deposits for 2021-22 against 8.5 per cent in the previous fiscal.
This is the lowest return on PF deposits in the last four decades. Previously, in 2011-12, the rate of interest on PF deposits was close to this at 8.25 per cent.