The Employees’ Provident Fund Organisation on Wednesday declared an 8.55 per cent interest rate for financial year 2017-2018. The new rate is marginally lower than the 8.65 per cent interest offered for the financial year 2016-2017.
“The marginally lower interest rate is because the earnings from debt instruments have gone down by 1 per cent. This was however offset by a gain in our equity investments,” Central Provident Fund Commissioner, VP Joy told BusinessLine .
“There has been a gain of ₹ 1200 crore from our equity investments,” he added. The EPFO has invested ₹44,000 crore in equity- linked Exchange Traded Funds since August 2015. This is the reason why EPFO returns have been less muted than those from the General Provident Fund and Public Provident Fund that fell by around 0.4 per cent for the current financial year compared to the last.
This is the third consecutive cut in the EPFO interest rates. The provident fund body had offered an interest rate of 8.8 per cent in 2015-2016.