Your EPF money is set to rise at faster rate, 8.25% interest highest in 3 yrs

Your employee provident fund money is set to attract an interest rate of 8.25 per cent in 2023-2024 from the current 8.15 per cent.

In 2021-2022 and 2022-2023, the EPF interest rates were 8.1 per cent and 8.15 per cent, respectively, which means the 2023-2024 interest rate is the highest in three years.

The Central Board of Trustees (CBT) of the Employees Provident Fund Organisation has recommended to the Union Finance Ministry that the new interest of 8.25% could be applied to the accumulations in subscribers’ accounts for 2023-24. Once the Finance Ministry accepts the approval, the new rate will be officially notified in the government gazette. “Subsequently, the EPFO will credit the approved rate of interest to its subscribers’ accounts,” the Union Labour Ministry said in a press release.

The interest rate of EPF is reviewed every year. The interest rates are fixed based on the earnings of the retirement fund body on the deposits it has.

The scheme aims to provide retirement benefits for employees working in establishments that adhere to the EPF Act.

Make-up of EPF 

"The Employees' Provident Fund Organisation (EPFO) invests in various avenues, such as central government securities, state government securities, state development loans, and exchange-traded funds (ETFs), among others. EPFO also invests 15 per cent of the money in equity markets through ETFs, replicating the BSE Sensex and Nifty 50 indices. EPFO has also made investments in the CPSE ETF and the Bharat 22 ETF. According to the annual report of the EPFO, the total corpus of various funds managed by EPFO was Rs 21.36 lakh crore as of March 2023," said Chirag Madia of Value Research.

PF rate of 8.25 per cent is higher than small saving schemes

The interest rate of 8.25 per cent  is now higher as compared to small savings schemes like PPF, Sukanya Samriddhi Yojana and post office deposits, which offer up to 8.2 per cent annually.
 

The interest rates on small savings schemes, including public provident fund (PPF), national savings certificate (NSC) and Kisan Vikas Patra (KVP), are reviewed every quarter. 

Here is the list of small savings schemes and their interest rates for the January-March 2024 quarter

Savings Deposit: 4 per cent

1-Year Post Office Time Deposits: 6.9 per cent

2-Year Post Office Time Deposits: 7.0 per cent

3-Year Post Office Time Deposits: 7.1 per cent (7.0 per cent earlier)

5-Year Post Office Time Deposits: 7.5 per cent

National Saving Certificates (NSC): 7.7 per cent

Kisan Vikas Patra: 7.5 per cent 

Public Provident Fund: 7.1 per cent

Sukanya Samriddhi Account: 8.2 per cent 

Senior Citizens Savings Scheme: 8.2 per cent