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The current interest rate of EPF for the financial year 2023-24 is 8.25 percent, which was 8.15 percent before that. At the same time, from 2019 to 2021 it was 8.50 percent, while the highest interest rate to date was 12 percent in 2001.

EPFO Board Meeting: The meeting of the Employee Provident Fund Organization (EPFO) board is going to start shortly. It is believed that a big decision can be taken on the interest rates of EPF accounts in this meeting. However, if media reports are to be believed, EPFO may retain the interest rate of 8.25 percent, but some media reports say that there may be a slight increase or reduction in it.

What is the interest rate now?

Let us tell you that the current interest rate of EPF for the financial year 2023-24 is 8.25 percent, which was 8.15 percent before that. At the same time, from 2019 to 2021 it was 8.50 percent, while the highest interest rate to date was 12 percent in 2001.

How does your contribution to EPF work?

If you are employed, then every month 12 percent of your basic salary and dearness allowance is deposited in the EPF account. Along with this, your employer i.e. the company also contributes the same amount, but out of this 8.33 percent goes to the Employees Pension Scheme (EPS), and the remaining 3.67 percent is added to EPF.

The government has made membership in EPF mandatory for employees earning less than 15,000. This means that every person falling within this salary limit must have a PF account.

How is EPF calculated?

Suppose your basic salary + DA is Rs 14,000.

Your contribution- 12% × 14,000 = 1,680

Employer's contribution (EPF)- 3.67% × 14,000 = 514

Employer's contribution (EPS)- 8.33% × 14,000 = 1,166

Total contribution (EPF + EPF)- 1,680 + 514 = 2,194

Now, if the interest rate of EPF remains 8.25 percent per annum, then the monthly interest will be 8.25 percent / 12 = 0.679 percent

What will be the decision on the new EPF interest rate?

According to the report of Business Standard, this time the EPFO board may cut the interest rate slightly, as the pressure has increased due to the fall in the stock market and bond yield and more claim settlement. However, most people believe that the interest rate will be kept stable. Once the interest rate is fixed by the EPFO board, it will have to be approved by the Finance Ministry to implement it.

Largest social security organization

EPFO is the largest social security organization in India, with about 29.88 crore accounts (Annual Report 2022-23). It started on 15 November 1951 with the EPF Ordinance, which was later converted into the EPF Act of 1952. This law was implemented to protect the employees of factories and other establishments across the country.