Union Ministry of Finance has hiked the Employees Provident Fund (EPF) interest rate to 8.65 percent as approved by retirement fund manager EPFO, benefitting over 6 crore formal sector workers.
The interest rate offered by EPFO was 8.55 percent in 2017-18. Earlier, the EPFO had earlier reduced the interest rate in 2016-17 to 8.65 percent from 8.8 percent in 2015-16.
In February, the Central Board of Trustees chaired by Labour Minister Santosh Gangwar had decided to inflate the interest rate on EPF to 8.65 percent for 2018-19, which is the first increase in the last three years.
As per the EPFO estimates, the recent raise would levy a surplus of Rs 151.67 crore after providing 8.65 percent rate of interest for 2018-19 on EPF.
In the last fiscal, there would have been a deficit of Rs 158 crore on providing 8.7 percent rate of interest in EPF. That is why the body planned to offer 8.65 percent rate of interest for 2018-19.