NEW DELHI: The Employees’ Provident Fund Organisation (EPFO) on Wednesday declared an rate of interest of 8.55% for 2017-18 for over five crore contributors, less than 8.65% for 2016-17.
This is the second one time in a row that the retirement fund entity has lowered interest rates for its subscribers. The EPFO had introduced 8.65% interest rate on deposits for 2016-17 and in 2015-16 it used to be pegged at 8.8%.
At Central Board of Trustees (CBT) meeting, the EPFO decided to lower the rate despite studies that the retirement body had bought a portion of its investments in exchange-traded budget (ETF) worth Rs 2,886 crore previous as it wanted to retain the rate at 8.65%.
Sources additionally mentioned the EPFO had earned a return of Rs 1,054 crore on sale of ETFs in February, which would be enough to stick to 8.65% interest rate in the present fiscal 12 months.
The EPFO, which manages a corpus of over Rs 10 lakh crore, has been investing in ETFs since August 2015. The EPFO has invested around Rs 44,000 crore in the ETFs until date. While the EPFO has lowered the pastime, the returns from PF deposits are nonetheless horny compared to other investment schemes like PPF and bank deposits, which draw lower interest rates. Last 12 months, the government had trimmed the rates on small financial savings schemes equivalent to National Savings Certificate and PPF by means of 20 basis issues but spared senior electorate.
This is the second one time in a row that the retirement fund entity has lowered interest rates for its subscribers. The EPFO had introduced 8.65% interest rate on deposits for 2016-17 and in 2015-16 it used to be pegged at 8.8%.
At Central Board of Trustees (CBT) meeting, the EPFO decided to lower the rate despite studies that the retirement body had bought a portion of its investments in exchange-traded budget (ETF) worth Rs 2,886 crore previous as it wanted to retain the rate at 8.65%.
Sources additionally mentioned the EPFO had earned a return of Rs 1,054 crore on sale of ETFs in February, which would be enough to stick to 8.65% interest rate in the present fiscal 12 months.
The EPFO, which manages a corpus of over Rs 10 lakh crore, has been investing in ETFs since August 2015. The EPFO has invested around Rs 44,000 crore in the ETFs until date. While the EPFO has lowered the pastime, the returns from PF deposits are nonetheless horny compared to other investment schemes like PPF and bank deposits, which draw lower interest rates. Last 12 months, the government had trimmed the rates on small financial savings schemes equivalent to National Savings Certificate and PPF by means of 20 basis issues but spared senior electorate.
PF interest rate cut again, this time from 8.55% to 8.65%
![PF interest rate cut again, this time from 8.55% to 8.65%]()
Reviewed by Kailash
on
February 22, 2018
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