Government approves 8.15% interest rate for 2022-23 EPF scheme
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The central government on Monday approved the credit interest at 8.15% on deposits for the 2022-23 Employees' Provident Fund (EPF) scheme.
According to an official Employees' Provident Fund Organisation (EPFO) order, the Union Ministry of Labour and Employment has communicated the approval of the Centre to credit interest at 8.15% per annum for 2022-23 for its more than six crore subscribers.
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EPFO circular issued on Monday
"The Ministry of Labour and Employment, Government of India, has conveyed the approval of the Central Government under para 60 (1) of Employees' Provident Fund Scheme, 1952 to credit interest for the year 2022-23 to the account of each member of the EPF Scheme," the EPFO circular reportedly stated.
It asked the EPFO to issue instructions for crediting the interest to the members' accounts.
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EPFO recommended 8.15% interest rate in March
The government's approval came after the EPFO agreed in March to fix the interest rate on provident fund accumulations in member accounts at 8.15%. The decision was reached during a two-day meeting of the EPFO's Central Board of Trustees (CBT) in New Delhi.
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All you need to know about EPF
The EPF is a mandatory contribution for all salaried employees; an employer must also make a matching contribution to the employee's EPF account.
Moreover, the EPFO is one of the biggest social security organizations. It has stayed committed to its goal by strengthening and providing its members with a good assured interest rate even during times of absolute volatility.
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Know about employer, employee's contributions
It is worth noting that employees contribute 12% of their basic salary to their EPF account on a monthly basis.
Interestingly, the employee's contribution is fully deposited into the EPF account.
But in the employer's case, only 3.67% of the contribution gets deposited into the EPF account, and the rest 8.33% goes to the Employees' Pension Scheme (EPS).
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EPFO reduced EPF interest rate for 2021-22
To recall, in March last year, the EPFO made the decision to reduce the interest rate on EPF deposits for 2021-22 to a four-decade low of 8.1%. Before that, the credit interest rate was 8.5% for 2020-21.
According to the news agency PTI, it was the lowest since 1977-78, when the interest rate of the EPF stood at just 8%.