New Delhi: There is a big relief for the subscribers of the Employees Provident Fund (EPFO). Subscribers will continue to receive interest at the rate of 8.5%. Today this decision has been taken in the meeting of the Central Board of EPFO. Under this decision, EPFO will pay interest to its subscribers at the rate of 8.15% in the first phase, the remaining 0.35% interest will be paid in December. EPFO will sell its equity investment to give interest to subscribers. Also Read – Big decision on EPFO - Interest on PF fixed, crores of people will get this benefit
Actually, 8.5 percent interest was fixed on the Employees Provident Fund (EPF) for the year 2019-20, but it was not yet notified. Because the EPFO had funds for 8.15% return on PF, the Central Board of Trustees (CBT) would have to sell its ETF for the remaining 0.35%, which was decided today. Also Read – Epfo Withdrawal Rules: Your PF claim can be rejected due to these two reasons, know what to do now
Let me tell you that earlier CBT wanted to sell ETF Holdings in March itself, but then the plan was canceled due to the huge fall in the market. The proposal was valid till June, it was now renewed. The EPFO did not have funds, due to which it was unable to pay the interest to the subscribers. About 6 crore subscribers of EPF will benefit from this decision. Also Read – Epfo Rules For PF Withdrawal: If you are not able to withdraw money from PF account, then it may be a problem, check this way
It was reported that the returns of investments being made through exchange traded funds (ETF) for the last five years have come negative for EPFO. In fact, EPFO invests 85% of its annual deposits in debt instruments (eg bonds, debentures, etc.), while the remaining 15% invests equity through ETFs. Equity investment means stock market is generally more risky, but returns are good. This time due to Corona crisis, the performance of equity investment was very poor.