Mumbai: The interest rates on Employees’ Provident Fund (EPF) have seen steady dip over the years, hitting its five-year low of 8.55% in 2017-18.
With general elections quite visible, the retirement fund body yesterday finally had some good news for its subscribers. The interest rate has been hiked to 8.65% for the year 2018-19. Official notification is expected soon, once it gets the Finance Ministry’s nod.
Simply put, if you have Rs 7.5 lakh in your EPF account, you will earn Rs 64,875 as interest in the current fiscal, Rs 750 more than in the last financial year.
For instance, a 30-year-old new employee earning a monthly basic salary (plus dearness allowance) of Rs 10,000, who contributes 12% to EPF, can expect his own fund to grow to Rs 19,24,175 on retiring at the age of 60.
“Although EPFO is investing 15% of the incremental corpus in equities, methodology for this has not been implemented. This means that the hike in interest rate is applicable on the full corpus, including on the amount invested in equity,” Amit Gopal, India business leader-investments of investment advisory Mercer, told a leading daily.
The EPFO’s top decision-making body, the Central Board of Trustees, has already suggested exploring options to allow members to invest as per their individual risk appetite.
