EPFO recommends 8.5% annual rate of interest for financial year 2020-21

The Employees' Provident Fund Organisation (EPFO) on Thursday, March 4, 2021, announced the interest rates on Provident Fund deposits for the financial year 2020-21. The Central Board of the EPFO board has recommended 8.5 per cent interest for the financial year 2020-21, same as 2019-20.

The decision was taken in the 228th meeting of the Central Board of Trustees, EPF which was held today in Srinagar, Jammu & Kashmir under the chairmanship of Labour Minister Santosh Kumar Gangwar.

The Minister informed that the interest rate would be officially notified in the government gazette following which EPFO would credit the rate of interest into the subscribers' accounts. Since the year 2014 EPFO has consistently generated returns not less than 8.5 per cent. EPFO over the years has been able to distribute higher income to its members, through various economic cycles with minimal credit risk. Considering the high credit profile of the EPFO investment, the interest rate of EPFO is considerably higher than other comparable investment avenues available for subscribers.

For the current fiscal, the EPFO has decided to liquidate investment and the interest rate recommended is a result of combined income from interest received from debt investment as well as income realized from equity investment.

The Labour Ministry has informed that this has enabled EPFO to provide higher returns to its subscribers and still allowing EPFO with a healthy surplus to act as a cushion for providing higher returns in the future also.

EPFO has extended its provident fund, pension and insurance benefits to all employees of existing establishments covered under the erstwhile JK PF Act as well as the employees of newly covered establishments. EPFO has set up Regional Offices at Srinagar, Jammu and the facilitation centre at Leh.

The social security coverage of establishments under EPFO in Jammu and Kashmir and Ladakh has increased by 38 per cent, from 3458 on October 31, 2019, to 4754 on January 31, 2021. The benefits of social security schemes of EPFO in these UTs have been extended to 2.11 lakh subscribers by January this year as compared to 1.29 lakh in October 2019, registering a remarkable growth of 63 per cent.