PF is a significant fund for any salaried individual. At one time, this PF amount earned 12% annual interest. However, now this interest rate is around 8%.
There is now talk that the government is considering raising the interest rate to 10%. In the last financial year, an 8.25% interest rate was approved on the amount deposited in employees' PF accounts. After the approval process by the Ministry of Commerce and the Department of Personnel, the interest amount will be deposited between June and August. But will 10% interest be available next year? What was the central government's response in Parliament?
Taking interest rates into account, the PF interest rate for the year 2023-24 has been announced. Previously, the interest rate was 8.15%, but it was increased to 8.25%. Under the EPFO, 12% of an employee's basic salary is contributed. Consequently, the company contributes an equal amount, i.e., 12%. Consequently, 8.33% of the company's contribution is deposited into the Employee Pension Scheme (EPS).
Will we get a 10% interest rate? What is the government's response?
There is talk of increasing the EPF interest rate to 10 percent. This issue was also discussed in Parliament. MP Vijay Kumar aka Vijay Vasant asked a question in the Lok Sabha. State Minister for Labor and Employment Shobha Karandlaje responded in writing. EPFO has not received any representation from trade unions regarding increasing the EPF interest rate to 10 percent. The Central Board of Trustees (CBT) recommends the EPF interest rate. Representatives from the government, companies, and workers are present in the CBT. They meet and decide. The State Minister clarified that there is no such proposal at present.
When will the money come into the account?
The proposal for interest rates on PF is approved by the CBT. This proposal is then sent to the Finance Ministry. After receiving the green light from the Finance Ministry, the proposal is sent to the Labor Ministry. Official notices are issued. After the start of the new financial year, the interest amount is credited to employees' accounts. This takes three to six months. Currently, the government has clarified that there is no proposal to increase the interest rate by 10% or any other amount.
PC: SaamTV