EPF members will get interest at the rate of 8.5% in 2019-20
Members of Employees Provident Fund (EPF) can get interest at the rate of 8.5% in FY 2019-20. At the same time, it can also provide great relief to its customers. Retirement EPF interest rate can be paid in a lump sum. This time subscribers will be paid in installments. A portion will be paid only after December 31, 2020. This will benefit 19 crore people.
The proposal has been sent to the Ministry of Finance
EPFO sources have said that the employment ministry has sent a proposal to the finance ministry to transfer the EPF interest rate outright to all EPFO subscribers. The Employment Ministry proposal states that EPFO has made good money from Exchange Traded Funds (ETFs). With this, now all the EPF subscribers of the country can be given the current year’s EPF interest payment simultaneously.
There were plans to pay interest in two parts
Earlier on September 9, the Central Board of EPFO had decided that in view of the coronavirus crisis, EPF account holders would be paid interest in two parts. The board had said that the lockdown had affected the income of the institution. The EPFO board said in an announcement on September 9, 2020 that the Central Board has reviewed the interest payment issue due to the situation arising out of the Covid-19. It has suggested the current rate of 8.50 percent to the central government. Of this, 8.15% of the loan proceeds and the remaining 0.35% will be paid by December 31, 2020, from the profit from the sale of ETFs.
Market boom gains
EPFO has accumulated double the amount as estimated three months ago due to the market boom. The EPFO officer said that everyone has benefited by maintaining patience till December. It has taken a little longer for the interest to come into the accounts of the customers, but the good thing is that EPFO has received more income from the sale of Exchange Traded Fund (ETF). Even after paying an 8.5% interest rate, we will have an additional amount of Rs 1,000 crore.
500 crore in September
When the EPFO decided to pay interest in two installments in September, it had Rs 500 crore at that time. The EPFO had estimated to redeem its investments in ETFs in FY2020 in 2016 and was expected to get Rs 2,800 crore from it. The transaction was supposed to take place in March 2020, but after heavy selling in the market due to the Covid 19 epidemic, most of the stock’s returns were badly affected.
