Govt okays 8.1% interest on EPF deposits for 2021-22

Government has approved 8.1 per cent rate of interest on employees' provident fund (EPF) deposits for 2021-22 - an over four-decade low - for about five crore subscribers of retirement fund body Employees Provident Fund Organisation (EPFO). Earlier in March this year, EPFO had decided to lower the interest on provident fund deposits for 2021-22 to 8.1 per cent from 8.5 per cent provided in 2020-21. According to an EPFO office order issued on Friday, the Ministry of Labour and Employment has conveyed approval of the central government to credit 8.1 per cent rate of interest for 2021-22 to each member of the EPF scheme. The Labour Ministry had sent the proposal to the Ministry of Finance for its concurrence. Prior to this, the lowest rate of interest prior to this was in 1977-78, when it stood at 8 per cent.

Now, after the ratification of the interest rate by the government, the EPFO would start crediting the fixed rate of interest for the fiscal into the EPF accounts. The EPF interest rate provided for 2019-20 was the lowest since 2012-13, when it was brought down to 8.5 per cent. The rate of interest was slightly higher at 8.8 per cent in 2015-16. It had given 8.75 per cent rate of interest in 2013-14 as well as 2014-15, higher than the 8.5 per cent for 2012-13. The rate of interest was 8.25 per cent in 2011-12.