New Delhi- Retirement fund body EPFO on Tuesday marginally raised interest rate on employees’ provident fund (EPF) deposits to 8.15 per cent for 2022-23 for its over six crore subscribers.

In March 2022, Employees’ Provident Fund Organisation (EPFO) had lowered the interest rate on EPF for 2021-22 to a four-decade low of 8.10 per cent for its subscribers, from 8.5 per cent in 2020-21.

This was the lowest since 1977-78, when the EPF interest rate stood at 8 per cent.

The apex decision making body of EPFO, Central Board Trustees (CBT) headed by Union Labour Minister Bhupender Yadav, recommended 8.15 per cent annual rate of interest to be credited on EPF accumulations in members’ accounts for financial year 2022-23, a labour ministry statement said.

The interest rate would be officially notified in the government gazette after approval of Ministry of Finance, following which EPFO would credit the rate of interest into subscribers’ accounts, it said.

The recommended rate of interest of 8.15 per cent safeguards the surplus as well as guarantees increased income to members, it stated adding that in fact, this rate of interest and the surplus of Rs 663.91 crore are higher than the last year’s.

According to EPFO’s income projection, the body would have had a surplus of Rs 112.78 crore on providing 8.20 per cent interest rate on EPF for 2022-23. There would have been a deficit of Rs 438.34 crore on providing 8.25 per cent rate of interest.

The ministry said the board’s recommendation involves distribution of more than Rs 90,000 crore in the members’ account on total principal amount of Rs 11 lakh crore which was Rs 77,424.84 crore (interest) and Rs 9.56 lakh crore (principal), respectively in 2021-22.

The total income recommended for distribution is highest till date, it claimed adding that the growth in income and the principal amount are respectively more than 16 per cent and 15 per cent as compared to that in 2021-22.

EPFO over the years has been able to distribute higher income to its members, through various economic cycles with minimal credit risk, it stated.

Considering the credit profile of the EPFO investment, the interest rate of EPFO is higher than other comparable investment avenues available for subscribers, it said.

EPFO has consistently followed a prudent and balanced approach towards investment, putting the highest emphasis on safety and preservation of principal with an approach of caution and growth, the statement said.

EPFO being one of the largest social security organisations has stayed true to its objective by maintaining and providing its subscribers with the high assured interest rate even during the periods of volatility in equity and capital markets, it added.

A blend of conservative yet progressive approach of investment followed by EPFO has made it a wise option for EPF members, it opined.

The CBT’s decision on interest rate on EPF deposits for 2022-23 will now be sent to Ministry of Finance for concurrence.

After the government’s ratification, interest rate on EPF for 2022-23 will be credited into accounts of over six crore subscribers of EPFO.

EPFO provides the rate of interest only after it is ratified by the government through the finance ministry.

In March 2020, EPFO had lowered the interest rate on provident fund deposits to a seven-year low of 8.5 per cent for 2019-20, from 8.65 per cent provided for 2018-19.

EPFO had provided 8.65 per cent interest rate to its subscribers in 2016-17 and 8.55 per cent in 2017-18. The rate of interest was slightly higher at 8.8 per cent in 2015-16.

The retirement fund body had given 8.75 per cent rate of interest in 2013-14 as well as 2014-15, higher than 8.5 per cent for 2012-13.

The rate of interest was 8.25 per cent in 2011-12. (PTI)


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