For the fiscal year 2019-20, employees in the private sector will get the declared EPF interest rate of 8.5 percent at one go. As per EPFO official, the EPFO in view of the stock market condition has offloaded its equity investment and has double the surplus then estimated three months back.
Also, the finance ministry has been written a letter to seeking credit of interest on EPF account into accounts of 190 million EPF account holders for the year 2019-20. The approval from the ministry is expected in a week's time said an official.
Earlier, Santosh Kumar, labour and employment minister notified due to the pandemic, the interest shall be credited into EPF account holders' account in 2 installments.
"Patience paid off well for us. Though it has taken a bit longer to credit interest to subscribers, the good news is that the EPFO has received higher income from the sale of exchange traded funds (ETFs) now. With an interest rate of 8.5 per cent now, we will be left with a huge surplus of around Rs 1,000 crore," the EPFO official said.
"The return on ETF investments is so healthy that we can easily give up to 8.6 per cent interest rate to our subscribers, but since the trustees have decided to credit 8.5 per cent for this year, we will stick to it and carry forward the higher surplus to the next fiscal year," the official cited above said.
Earlier, the EPFO decided to offloaded its ETF investments in March but deferred on weak market conditions.
Given the interest rate, return for EPF investors is at a 7-year low. In the previous fiscal year, 8.65% return was given on EPF investment.