EPF to pay 12 p.c. interest

By Our Special Correspondent

NEW DELHI, APRIL 25. The Central Board of trustees of the Employees Provident Fund (EPF) at their 153rd meeting today decided to maintain the interest rate on Provident Fund (PF) deposits at 12 per cent per annum for the current financial year. However, the issue would be reviewed next year, since the Government has reduced the interest rate on Special Deposit Scheme (SDS) by one per cent. As of now, as much as 81 per cent of the total PF holdings are placed in the SDS.

The issue of maintaining the interest rate on PF deposits assumes importance because the Finance Minister, Mr. Yashwant Sinha, had announced a one per cent cut in the interest rate on General Provident Fund (GPF) deposits in his budget speech this year. While the GPF mainly involves Government employees, the EPF pertains to private sector employees. The expectation was that the interest on EPF would also be reduced.

However, the Central Board of Trustees of the EPF took into account that 16 per cent of the EPF deposits invested in Government securities and public sector financial institution bonds would enable them to maintain the interest rate on deposits at 12 per cent for one more year, despite the yield on deposits in SDS going down from 12.6 per cent per annum to 11.27 per cent during the current financial year.

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Section  : National
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