On July 24, 2023, the union government of India made an important announcement regarding the employees provident fund (EPF) scheme. It has decided to raise the interest rate on deposits for the financial year 2022-2023 to 8.15 per cent. This increase in interest rate is great news for over 6 crore subscribers who will benefit from it in the current fiscal year.
The decision to hike the interest rate was initially recommended by the central board of trustees (CBT) of the employees’ provident fund organisation (EPFO). Following the CBT’s recommendations, the ministry of labour and employment conveyed its approval of the increased EPF interest rate, as stated in the circular issued on July 24, 2023. The EPFO has already instructed its field offices to credit the interest at the rate of 8.15 per cent for FY23 into the EPF members’ accounts.
The EPFO’s decision-making process involves the CBT deliberating on key issues, such as the interest rate, based on the projected income of the retirement fund manager.
The EPFO had recommended the interest rate hike to 8.15 per cent for FY23 on March 28, 2023. Now, with the approval from the finance ministry, it can proceed to credit the interest to its subscribers’ accounts.
Compared to other savings instruments, the EPFO rate remains one of the highest, with small savings rates ranging from 4.0 per cent to 8.2 per cent.