Employees' Provident Fund interest rate set to rise to a three-year high

Once ratified by the finance ministry, over six crore provident fund subscribers will benefit from this decision

Employees’ Provident Fund interest rate set to rise to a three-year high

Your Employees' Provident Fund (EPF) money will grow at 8.25 per cent in 2023-24, up from 8.15 per cent earlier.

This was decided by the Central Board of Trustees (CBT) of the Employees Provident Fund Organization (EPFO).

CBT's decision will now be forwarded to the finance ministry. Once ratified, over six crore provident fund subscribers will receive the interest money in their accounts.

A three-year high
In 2021-22 and 2022-23, the EPF interest rates were 8.1 per cent and 8.15 per cent, respectively.

Therefore, the interest rate fixed for 2023-24 is the highest since 2020-21.

EPF interest rates of last 10 years

Year Interest rates (in %)
2014-15 8.75
2015-16 8.8
2016-17 8.65
2017-18 8.55
2018-19 8.65
2019-20 8.5
2020-21 8.5
2021-22 8.1
2022-23 8.15
2023-24 8.25*
Source: EPFO
*Recommended by the EPFO. Yet to be ratified by the finance ministry.

The interest rate of EPF is reviewed every year.

The scheme aims to provide retirement benefits for employees working in establishments that adhere to the EPF Act.

Make-up of EPF
The Employees' Provident Fund Organisation (EPFO) invests in various avenues, such as central government securities, state government securities, state development loans, and exchange-traded funds (ETFs), among others.

EPFO also invests 15 per cent of the money in equity markets through ETFs, replicating the BSE Sensex and Nifty 50 indices. EPFO has also made investments in the CPSE ETF and the Bharat 22 ETF.

According to the annual report of the EPFO, the total corpus of various funds managed by EPFO was Rs 21.36 lakh crore as of March 2023. The share of total investments in ETFs stood at Rs 1.96 lakh crore, compared to Rs 1.59 lakh crore in 2021-22.

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