EPFO, the retirement fund agency, voted on Saturday to cut the interest rate on provident fund deposits for 2021-22 to an almost four-decade low of 8.1 percent, down from 8.5 percent in 2020-21.
This is the lowest interest rate since 1977-78, when the EPF interest rate was 8%.
In its meeting held on Saturday, the Employees' Provident Fund Organisation's (EPFO's) highest decision-making body Central Board of Trustees resolved to offer an 8.1 percent rate of interest on Employees Provident Fund (EPF) for 2021-22.
In March 2021, the Central Board of Trustees (CBT) settled on an interest rate of 8.5 percent on EPF deposits year 2020-21.
The finance minister confirmed it in October 2021, and EPFO provided instructions to field offices to credit interest revenue at 8.5 percent to subscribers' accounts for 2020-21.
The interest rate on EPF deposits for 2021-22 will now be forwarded to the Ministry of Finance for approval after the CBT decision. The rate of interest is only provided by EPFO once it has been approved by the government through the finance ministry.
EPFO decreased the interest rate on provident fund deposits to a seven-year low of 8.5 percent in March 2020, down from 8.65 percent in 2018-19.
The interest rate on the EPF for 2019-20 was the lowest since 2012-13, when it was reduced to 8.5 percent.
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