What is the EPF Interest Rate?
The Employee Provident Fund (EPF) is a savings scheme that is available to employees in India. The project is managed by the Employees’ Provident Fund Organization (EPFO), a statutory body under the Ministry of Labour and Employment. The EPF scheme provides financial security to employees by enabling them to save a part of their salary towards their retirement. The EPF interest rate is the rate at which the money in the EPF account earns interest.
The EPF interest rate is set by the EPFO every year based on the prevailing economic conditions. The EPFO considers various factors, such as inflation, GDP growth, and the returns on government securities, to determine the interest rate. The EPFO announces the interest rate for a particular financial year, which starts on April 1st and ends on March 31st of the following year you will be able to get the EPF Passbook Download.
Over the years, the EPF interest rate has varied depending on the prevailing economic conditions. In the last few years, the EPF interest rate has been steadily decreasing due to a fall in interest rates on government securities and fixed deposits. In the financial year 2019-20, the EPF interest rate was 8.50%, which was the lowest in the last seven years. However, in the financial year 2020-21, the EPF interest rate was raised to 8.5% to provide some relief to employees during the COVID-19 pandemic and then you get to know about the EPF Interest Rate.
For the financial year 2021-22, the EPFO has declared an interest rate of 8.5% on the EPF account balance. The interest will be credited to the accounts of EPF subscribers in two installments – 8.15% for the first half (April to September 2021) and 0.35% for the second half (October to March 2022). This is the same interest rate as the previous financial year, and it is higher than the interest rate offered by most banks on fixed deposits.
It is important to note that the EPF interest rate is tax-free, which means that the interest earned on the EPF account is not subject to income tax. However, if an employee withdraws the money from the EPF account before completing five years of continuous service, the interest earned on the account becomes taxable. Also, make sure you check the EPF Passbook Download to know more about the same.
In conclusion, the EPF interest rate is the rate at which the money in the EPF account earns interest. The interest rate is set by the EPFO every year based on the prevailing economic conditions, and it is announced for a particular financial year. The EPF interest rate has been steadily decreasing in the last few years, but it is still higher than the interest rate offered by most banks on fixed deposits. The EPF interest earned is tax-free, but if the money is withdrawn before completing five years of continuous service, the interest becomes taxable. Thus you can make out how things work in the right world.