EPF to pay 8.25% interest to subscribers for FY2023-24
12 Feb 2024
The Central Board of Trustees of the Employees Provident Fund Organisation (EPFO), at its meeting on 10 February 2024, recommended payment of annual interest of 8.25 per cent to be credited to the accumulated amounts in members' accounts for the financial year 2023-24.
This interest rate will be officially notified in the government gazette after approval by the ministry of finance. Subsequently, EPFO will credit the interest into its subscribers' accounts.
The board has recommended a distribution of historic income amount of Rs1,07,000 crore to EPF members' accounts on a total principal amount of about Rs13 lakh crore, up from Rs91,151.66 crore and Rs11.02 lakh crore, respectively, in the 2022-23 financial year. The total income recommended for distribution is the highest on record.
The income has shown a significant growth of more than 17.39 per cent, while the principal amount has shown a 17.97 per cent growth, signifying healthy financial performance and potentially strong returns for subscribers.
The interest rate of 8.25 per cent is the highest interest paid by the EPFO in three years. EPFO has consistently been offering higher rate of interest to subscribers.
In March 2022, EPFO had lowered interest rate for 2021-22 to 8.1 per cent from 8.5 per cent paid in 2020-21. This was the lowest since 1977-78 when it was 8 per cent.
With a total subscriber base of 290 million, EPFO remains one of the most attractive savings mechanisms where returns do not attract income tax if annual contributions, statutory and voluntary, remains below Rs2.5 lakh.