EPFO fixes 8.15% interest rate on employees' provident fund for FY23

Fund paid 8.1% interest rate to subscribers in 2021-22, marking a four-decade low

The interest rate on employees' provident fund deposits was on Tuesday raised to 8.15 per cent for FY23 from a four-decade low of 8.1 per cent in the previous year.

"The 8.15 per cent interest rate has been recommended by the Central Board of Trustees (CBT) in the 233rd rate, which will be sent to the Finance ministry for further ratification" said Bhupendra Yadav, union labour minister, at an event.

After the ministry approves it, the recommendation would be notified in the government’s gazette and then the EPFO would credit the rate of interest into its subscribers' accounts.

The EPFO paid 8.1 per cent interest rate to its subscribers in 2021-22, which was lower than 8.5 per cent from 2020-21. The rate was the same in 2019-20. The rate was 8.65 per cent in 2018-19 and 8.55 per cent in 2017-18. In 2016-17, the interest rate was at 8.65 per cent.

This interest rate will be applicable on Voluntary Provident Fund (VPF) deposits as well. Those employees whose EPF accounts are with an exempted trust will also receive this interest rate on their EPF deposits.

"Reserve fund has increased as compared to last year. Since EPFO is a custodian of people's wealth, the investment is done rather conservatively, though it is also to increase the wealth as well," said Yadav.

The interest rates are fixed based on the earnings of the retirement fund body on the deposits it has.