EPFO: People working in the private sector are going to get a big good news soon. The government is making a big preparation regarding the interest rates of the Employees Provident Fund Organization (EPFO) 2024-25. The government is now considering creating an ‘Interest Stabilization Reserve Fund’ for EPFO. EPFO members are going to get a big benefit from this fund.
EPFO News: The government is soon going to give a big good news to crores of account holders of the Employees’ Provident Fund Organization (EPFO). The government is now considering creating an ‘Interest Stabilization Reserve Fund’ for the EPFO. Its purpose is to give a fixed interest rate to crores of EPFO members on their Provident Fund (PF) contributions.
The government is taking this big step
The government is now looking for a way to ensure that Employees’ Provident Fund Organisation (EPFO) members get fixed interest rates without being affected by market fluctuations. The move is aimed at benefiting over 6 crore account holders who depend on the EPFO for their retirement security, reports The Economic Times. Officials said the ministry of labour and employment is conducting an internal study to create an Interest Stabilisation Reserve Fund. The fund aims to ensure that EPFO subscribers get stable interest rates on their provident fund even if the market fluctuates.
You will get fixed interest rate!
Under the scheme, surplus interest will be put into a reserve fund, ensuring that subscribers get fixed interest rates even if EPFO’s interest income falls. This move will reduce sharp changes in interest rates due to market fluctuations. Although this initiative is still in its initial stages, it is likely to be given final touches by the end of this year. After getting approval from the Central Board of Trust of EPFO, it can be implemented from 2026-27.
It is also important to note that EPFO interest rates have changed over the years. It was 3% in 1952-53, which increased to 12% in 1989-90. This interest rate is the highest ever. After this, this rate decreased to 9.5% (2001-02) and then to 8.5% (2005-06). In 2010-11, the interest rate again increased to 9.5% but decreased to 8.25% in 2011-12 and in 2021-22 it reached 8.10%. Currently, in 2022-23, the interest rate has increased slightly to 8.15%.
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