PF Money: EPFO plans interest rate cut on provident fund savings
PF Money: The Employees' Provident Fund Organisation (EPFO) is considering a cut of 15 basis points in the interest rate on PF deposits in FY20 to 8.5%. The issue is expected to be taken up at the Central Board of Trustees (CBT) meeting of the EPFO slated for March 5.
If this materializes, the salaried employees would earn lower returns for the financial year ending March 31, 2020. EPFO was offering subscribers an interest of 8.65 percent in 2018-19.
Just before the CBT meeting on the rate of return on PF deposits, the Finance Investment and Audit Committee (FIAC) will take a final call. The CBT headed by the Labour minister is the apex decision-making body of the EPFO having an active subscriber case of 600,000.
The EPFO invests 85 percent of its annual accruals in debt market and 15 percent in equities through exchange-traded funds. At the end of March last year, the EPFO had a cumulative investment of Rs 74,324 crore in equities, fetching a return of 14.74 percent.
