As a sop to the employees serving in the organized sector, the retirement fund body EPFO may hike interest rate on EPF from the current level of 8.55%. In accordance with the report in the leading business daily, officials with knowledge on the development pointed there remains a good chance that the retirement fund manager would hike EPF rate. At least the return from EPF will be retained at the current level.
EPF savings in 2017-18 offered 8.55% return, which was a 5-year low. And even an unchanged rate of return of 8.55% on EPF in 2018-19 makes the savings scheme most rewarding.
"2018 has been a relatively low-yielding year for debt investments, but the EPFO is unlikely to revise the interest rate downward for 2018-19 from what it paid last fiscal," said one of the officials cited earlier. "It's an important year and we are making the last round of calculations before announcing the EPF rate in late January.
During the last year, the average interest rate on National Savings Certificate (NSC) and Public Provident Fund (PPF) came in at 7.7%. Also, ultra short-term debt funds that invest in securities with maturity spanning three to six months yielded an average return of 7.78%.
Though typically EPF rate is announced in December every year, the delay this time is on account of accounts audit that are currently going on in the organization. And the rate is likely to be announced in late January ahead of the vote on account expected on 1 February.