In this article I will explain the changes done by Employees Provident Fund Organization (EPFO) to increase the interest rates of Employee Provident Fund (EPF). It is good news for the employees who are derogatorily saving the money into the PF account. The debate for this changes has been for nearly six months, finally EPFO has announced this decision Sep 16, 2010. Read the following sections for more details. If you like the article, please subscribe it here.
EPF Interest Rates
The existing rates for PF account is 8.5% p.a. The interest amount is cumulative for each month. That is the reason why PF is one of the best savings plan for the employees. The EPF rate has been 8.5% since 2005-06. The decision was taken by the Central Board of Trustees (CBT) of the EPFO. Company-run PF trusts could be affected as they are required to match the EPFO rate. EPFO’s estimated 2010-11 earnings would only support a payout of 8.5% and the decision to provide 9.5% interest rate would result in a deficit of about Rs 1,600 crore.
Another bad news is that, if the PF account is idle for more than three years, they there will not be any interest paid for that account. That means if you leave a company and leave the PF account. It will earn the interest for first three years.
This hike will be benefited by the salaried people to match with the increase in the inflation. Inflation is the main reason why the PF rate is increased. If you have any doubts please post it in the comments section.
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