Good news for EPFO members. The government is making moves to upgrade the services provided by the EPFO (Employees Provident Fund Organisation) to enhance the user experience on its retirement fund portal. In the meantime, the Central Board of Trustees (CBT), which is the top decision-making group for the EPFO, is set to meet on February 28 to finalize the interest rate for provident fund deposits for the financial year 2024-25.
The CBT holds meetings every quarter. Led by the Union Minister of Labor and Employment, the board also includes members from employee associations, trade unions, and officials from both central and state governments. Currently, the EPFO offers an interest rate of 8.25% on provident fund deposits, and reports indicate that this rate might remain unchanged for the upcoming financial year. However, it needs to be approved by the CBT on February 28 before the Finance Ministry gives the final nod.
Looking at the EPFO rate trends, the current rate of 8.25% for FY 2023-24 is the highest the EPFO has offered in the last three years. The previous year’s rate was 8.15%, and the lowest in recent years was 8.10% in 2021-22, which was the lowest since 1977-78 when it was at 8%. Over the last decade, the EPFO has adjusted interest rates frequently, peaking at 9.50% in 2010-11. From 2019 to 2021, the rates were stable at 8.50%.
The central government is also looking into the possibility of providing a fixed interest rate on EPF deposits to ensure consistent returns for millions of EPFO members. There are discussions about setting up an Interest Stabilization Reserve Fund to help maintain stable interest rates.
How does the government handle EPF deposits?
The EPFO puts money into the stock market by using exchange-traded funds (ETFs) that track the BSE-Sensex and NSE Nifty-50 indices. Recently, they announced EPFO 3.0, a significant upgrade to the EPFO system set to roll out on June 1 this year. This new version will bring some big changes to how services are offered to millions of EPF members.