The field officers of the retirement fund body has been asked to credit 8.55% interest rate into the accounts of as many as 5 crore subscribers for the Fy 2017-18. The finance ministry has given its go-ahead and thereafter labour ministry is said to have conveyed the order to its field officers.
The ratification to this effect has been made long ago but was not implemented earlier due to the model code of conduct in respect of Karnataka elections. In an earlier instance, the labour ministry sought approval of the Election commission to notify the rate for crediting the interest rate for the gone by fiscal year.
The rate for the EPF account had been fixed at the meet of EPFO' CBT on February 21, 2018.
This is the lowest rate of interest on the retirement fund in the last 5 years time. In 2015-16, members got the highest interest rate of 8.8% p.a.
While in the FY 2016-17, the rate stood at 8.65%. In the year 2014-15 and 2013-14, the members of the EPFO fund recived 8.75% return on their EPF contribution.
What investor can do to reach retirement goals with interest rate falling on EPF?
One thing it is a compulsory contribution which you as a salaried employee cannot get away with. Despite the falling interest rate, the EPFO is continuously working out ways to make it lucrative option for investors as in the recent attempt to increase equity exposure to over 15%.
Plus you need to keep in mind while EPF is still a good bet to accumulate a sizable corpus over a long tenure of your employment. You cannot solely depend on the tool and have to look for other options such as NPS, mutual funds etc. to rightly strike the retirement corpus at just at the desired timeframe.