EPFO good news for employees! Higher Provident Fund interest rate at 8.65% likely to be announced as soon as next week
EPFO update: The coming week is likely to bring good news for employees, as their Provident Fund interest rate is set to be hiked!
EPFO update: The coming week is likely to bring good news for employees, as their Provident Fund interest rate is set to be hiked! Zee Business Online has come to know through EPFO sources that provident fund would get an interest rate of 8.65 percent for the financial year 2018-19 - Centre may notify the 8.65 percent interest rate as early as next week. The ongoing tussle between the Ministry of Labour and the Finance Ministry over the interest rate is now over and bar the announcement, everything else has been decided. The EPFO interest rates will be notified by the next week and it will extend the direct benefit to 4.6 crore EPF account holders.
According to sources, the ministries of Finance and Labour had a long-running tussle over the interest rate on the Provident Fund. However, Labour Minister Santosh Kumar Gangwar and Finance Minister Nirmala Sitharaman recently held a meeting and agreed to pay more interest on PF, say sources. The notification in this regard will be released by next week. After that notification, interest will be credited in the accounts of all the provident fund account holders.
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More interest on Provident Fund
Since the tussle over providing interest on provident fund is over, the EPFO, while presenting its views, has clarified that interest should be paid as per recommendations, according to sources. In the financial year 2018-19, the EPFO announced 8.65 per cent interest rate in January 2019. The Finance Ministry also approved the same, but due to IL&FS crisis, the ministry asked the EPFO to review the interest rate. Following this reason, the notification on the interest rate was not released. The EPFO, however, was in favour of paying more interest to the PF account holders.
Why you will get more money
For the financial year 2018-2019, the EPFO has recommended raising the interest rates on PF from 8.55 per cent to 8.65 per cent. A senior official told Zee Business online that even after paying more interest on the PF, the EPFO still has cash amount of over Rs 150 crore. Since the organisation has already recovered losses due to weak interest rates, therefore, there is no problem in paying more interest to the PF account holders.
What was Finance Ministry's concern
The Finance Ministry was concerned that it would not be possible for banks to pay attractive rates in the wake of higher interest rates on PF, thereby, directly affecting the economy. This objection came on part of Finance Ministry at a time when banks were striving hard to raise funds by not reducing interest rates on loans.
The issue has now been resolved. (Original story was filed by Shubham Shukla from Zee Business Hindi)