EPF interest rate reduced to 8.1% for FY22, lowest in 40 years; Impact on 6 crore employees

For the financial year 2021-22, the government has authorized the decision to pay interest at a rate of 8.10 percent instead of 8.50 percent on the amount deposited in the PF account. On Friday, the EPFO (Employees’ Provident Fund Organization) published its office order. This is the lowest rate in over 40 years. The EPFO had given an interest rate of 8% in 1977-78. Since then, it’s been at least 8.25 percent. The interest rate has been 8.50 percent for the last two fiscal years (2019-20 and 2020-21). PF affects around 6 crore employees in the country.

The reimbursement, which has now been confirmed by the finance ministry, is in line with the agency’s earnings and will result in a Rs.450 crore surplus for the current fiscal year.

Compared to last year’s revenues of 8.5 percent on the corpus, the EPFO has anticipated an income of Rs 76,768 crore this year, translating to a 7.9% return, labour minister Bhupendra Yadav said following an EPFO meeting in Guwahati in March.

The administration said that interest payments were higher due to rising stock markets, which have taken a beating in recent weeks as a result of the Ukraine conflict and expectations of monetary policy tightening in the United States and other wealthy nations.

The EPFO cut the interest rate on provident fund deposits to 8.5 percent for 2019-20, down from 8.65 percent in 2018-19, in March 2020.

In March 2021, the Central Board of Trustees (CBT) settled on an interest rate of 8.5 percent on EPF deposits for 2020-21.

The finance ministry ratified it in October 2021. Following that, the EPFO directed field offices to credit interest income of 8.5 percent to subscribers’ accounts for 2020-21.

The interest rate on the EPF for 2019-20 was the lowest since 2012-13, when it was reduced to 8.5 percent.

EPFO offered its subscribers an interest rate of 8.65 percent in 2016-17 and 8.55 percent in 2017-18.

In 2015-16, the interest rate was slightly higher, at 8.8%. It offered an interest rate of 8.75 percent in 2013-14 and 2014-15, up from 8.5 percent in 2012-13. In 2011-12, the interest rate was 8.25 percent.

EPFO Stated in Circular:

The Ministry of Labour and Employment, Government of India, has conveyed the approval of the Central Government under para 60(1) of Employees’ Provident Fund Scheme, 1952 to credit interest @ 8.10 % for the year 2021-22 to the account of each member of the EPF Scheme as per the provisions under Para 60 of EPF Scheme, 1952.

2. You are, accordingly, requested to issue necessary instructions to all the concerned for crediting the said interest to the members’ accounts.

For Official Circular Download PDF Given Below: