New EPF interest rate announced by the Union Labour Minister Santosh Gangwar on 3rd March 2020. The interest rate for the scheme has been revised and lowered by 0.15% for the current financial year. For 2019-20, the interest rate is 8.50% which is reduced from the earlier 8.65 per cent.
“The EPFO has decided to provide 8.5 per cent interest rate on EPF deposits for 2019-20 in the Central Board of Trustees (CBT) meeting held today”, states Gangwar.
In contrast to the constant demands from workers about hike in EPF interest rates, the directors released the new percentage which will give lower interest on the fund deposits by salaried employees. The economic slowdown and its negative impact on debt market instruments including government securities and FDs can be a major reason for the drop in EPF interest rates for the financial year 2019-20. The retirement body of India invests 15% in equity and 85% in debt instruments implying that the fall in debt investments would have hampered its income in 2019-20.
Earlier in the year 2016-17 and 2018-19, the EPFO has given 8.65% rate of interest to the subscribers. And, it was 8.8% in 2015-16.