Provident fund deposits to fetch lower interest -- from 8.65% to 8.55%

February 21, 2018 21:58

Retirement fund body EPFO today lowered the rate of interest on employees provident fund to 8.55 per cent for its over 6-crore subscribers for 2017-18, from 8.65 per cent in the previous fiscal.

"It is difficult to evaluate about future in view of present economic scenario. We paid 8.65 per cent last fiscal, which left a surplus of Rs 695 crore. This year, we have decided to recommend 8.55 per cent for 2017-18, which will leave a surplus of Rs 586 crore," Labour Minister Santosh Gangwar said.

Gangwar expressed hope that the trade unions will agree to the decision of providing 8.55 per cent rate of interest.

The minister also said the EPFO has liquidated portion of its investments in the exchange traded funds to bridge the gap to provide 8.55 per cent interest this fiscal.

He said the EPFO received 8 per cent returns on its bond investments but it is able to pay 8.55 per cent rate because it has sold some of its investments in ETFs.

He explained that it is higher than 7.6 per cent provided to General Provident Fund and Public Provident Fund subscribers.

-- PTI

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