New Delhi, July 4 The interest rate on Employees Provident Fund will remain at 8.5 per cent this year.
The decision to keep interest rates unchanged was taken despite the workers’ unions demanding 9.5 per cent interest rate.
Currently, the Employees’ Provident Fund Organisation offers the highest rates on deposits.
Even post-office saving schemes such as the National Savings Certificate and Time Deposits offer interest rates of 8 per cent and 6.25-7.50 per cent respectively for a tenure of one to six years. This is on a minimum amount of Rs 100 and Rs 200 respectively. Public sector banks such as Punjab National Bank and State Bank of India offer deposit rates between 6.50 and 7 per cent for one year below Rs 1 crore.
However, the unions argued that since the money invested in EPF is long-term compared with the bank deposits, usually up to one year, the rates should be higher.
But, after presiding over the meeting of the Central Board of Trustees on Saturday. the Union Minister for Labour and Employment, Mr Mallikarjun Kharge, said: “It has been decided that interest rates will be retained at last year’s level of 8.5 per cent. Employees representatives were in favour of higher interest rates. According to capacity and availability of funds we have taken this decision even though the market is under pressure.”
However, no discussion took place on 15 per cent of the provident fund money being invested in the equity market, as recommended by the Finance Ministry last year. “We will look into the issue separately considering the safety and security of the workers,” Mr Kharge said.Related Stories:
EPF interest rate to remain at 8.5%