The ministry of finance has agreed to 8.65% interest rate on Employee's Provident Fund for 2018-19 as earlier decided by the retirement fund body EPFO. The move is expected to benefit as many as 6 crore employees in the formal sector.
"The Department of Financial Services (DFS), a wing of Finance Ministry, has given its concurrence to Employees Provident Fund Organisation's (EPFO) decision to provide 8.65 per cent rate of interest for 2018-19 to its subscribers," a source with knowledge on the development is cited as saying in a PTI report.
"The DFS has approved the proposal subject to fulfilment of certain conditions related to efficient management of the retirement fund," the source added further.
In February, Central Board of Trustees, the apex decision making body of EPFO with Labour Minister Santosh Gangwar as its head decided to hike interest rates on EPF to 8.65% for 2018-19, its first increase in last 3 years.
For the fiscal year 2017-18, a five-year low interest rate of 8.55% was offered on EPF account. In 2015-16, EPF provided an interest rate of 8.8%, which in the subsequent fiscal year 2016-17 was reduced to 8.65%.
Post the agreement expressed on the interest rate decision by the finance ministry, the labour ministry and the department of tax will notify the interest rate on EPF for 2018-19. Later, the EPFO would ask its over 129 field offices to credit the interest amount into the account of EPF subscribers and settle claims accordingly.