PF Interest Rate Reduced to 8.10% for FY 2021-22

EPFO notifies the reduced PF Interest Rate of 8.1%, as approved by the GOI, applicable for the Financial Year (FY) 2021-22, as against the rate of 8.50% for FY 2020-21.

Also, EPFO has issued instructions for crediting PF Interest (FY 2021-22) in the respective EPF Member’s Account in due course for their fund accumulations.

EPFO Circular No. 4670 dt. 03/06/2022: Govt. approves Reduced EPF Interest Rate at 8.10% for FY 2021-22

Declaration of Rate of Interest for the Employees’ Provident Fund Members Account for the year 2021-22

1. The Ministry of Labour and Employment, Government of India, has conveyed the approval of the Central Government, under para 60(1) of Employees’ Provident Fund Scheme, 1952 to credit interest @ 8.10 % for the year 2021-22 to the account of each member of the EPF Scheme as per the provisions under Para 60 of EPF Scheme, 1952.

2. You are, accordingly, requested to issue necessary instructions to all the concerned for crediting the said interest to the members’ accounts.

EPFO recommends Reduced PF Interest Rate at 8.10% for 2021-22

Earlier, the EPFO Central Board of Trustees (CBT) recommended that the EPF Interest Rate be reduced from 8.50% (FY 2020-21) to 8.10% (FY 2021-22) for crediting in the respective EPF Member’s Account for their fund accumulations. In due course, the amount of interest will be calculated/credited after concurrence/vetting from the Government of India.

It should be noted that the current proposed PF Interest Rate for FY 2021-22 at 8.1% is the lowest of the interest rates paid by EPFO since 1977-78, i.e. at 8.5% (FY 2019-20 and 2020-21), 8.65% (FY 2018-19), 8.55% (FY 2017-18), 8.65% (FY 2016-17), and so on.

According to the Ministry of Labour & Employment, GOI’s Press Release dated 12/03/2022, the 230th meeting of EPFO’s Central Board of Trustees (CBT) was held in Guwahati, where it was recommended to reduce the PF Interest Rate for the fiscal year 2021-22. For the fiscal year 2021-22, CBT has recommended that an annual rate of interest of 8.10% be credited on EPF accumulations in members’ accounts. The interest rate would be officially announced in the government gazette, after which EPFO would credit the rate of interest to the accounts of its subscribers.

EPFO has decided to liquidate some of its equity investments for FY 2021-22, and the recommended interest rate is a result of the combined income from debt interest and equity investment income. This allowed EPFO to provide a higher return to its subscribers while also providing a cushion for EPFO to provide a higher return in the future. Because of this income distribution, there is no overdraft on the EPFO corpus.

Para 60 of EPF Scheme 1952: Interest Provisions

According to the provisions of Para 60 of the EPF Scheme, PF Interest is required to be credited each year in the account of each member/ subscriber, based on rate approved by the Central Government in consultation with the Central Board of Trustees of EPFO. However, it may be noted that PF Interest is credited to each members account annually but the same is calculated based on monthly running balances.

PF Interest Rates from 1952

Notes:
1. Interest @ 8.25% plus Bonus @ 0.5% for members who  did not  withdraw  any PF amount during 1976-77 & 1977-78

2. 12% during April- June, 2001 and 11% from July, 2001 and onwards.

3. 9% Interest plus 0.5% Golden Jubilee bonus.

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EPFO Recommends 8.15% PF Interest Rate for FY 2022-23