Cut in the offing? EPFO may cut interest rate to 8.5% for FY20, says report

EPFO was offering subscribers an interest of 8.65% in 2018-19

The Employees' Provident Fund Oragnisation (EPFO) might reduce its interest rate by 15 basis points to 8.5% in FY20. The issue is likely to be taken up at the central board of trustees (CBT) meeting of the EPFO on March 5, says a news report in The Economic Times.

This means that salaried employees would earn lower returns for the financial year ending March 31, 2020. EPFO was offering subscribers an interest of 8.65 per cent in 2018-19.

The Finance Investment & Audit Committee (FIAC) will take a final call just before the CBT meet on the rate of return on PF deposits, depending on the exact earnings of the retirement fund body, the report said.

The EPFO invests 85 per cent of its annual accruals in debt market and 15 per cent in equities through exchange-traded funds. At the end of March last year, the EPFO had a cumulative investment of Rs 74,324 crore in equities, fetching a return of 14.74%.