PF Deduction: The government is now going to give another blow to the people working in private sectors. Actually, the government can take a big decision this month regarding the interest received on EPF (Employee Provident Fund). If sources are to be believed, the interest rate on PF can be cut this financial year. Employees working in private companies are shocked by this news, as PF interest was already being given at the lowest rate in 43 years.
How did PF interest keep decreasing after 2019?
At present, there are about six and a half crore account holders of PF across the country. The interest on PF was already at its lowest level. EPFO had fixed the interest rate of PF at 8.1 in the year 2021-22. This was the lowest level of interest rate since 1977-78. Before 2021-22 i.e. Corona period, the employees were getting interest at the rate of 8.5 percent. Whereas in the year 2019-20, the rate of interest on PF was reduced from 8.65 percent to 8.5 percent.
The meeting will be held in the last week of March
EPFO may hold an important meeting in the last week of March regarding the interest on PF. This meeting can be held on 25 or 26 March. If sources are to be believed, the current interest on PF can be reduced to 8 percent in this meeting. Since assembly elections are going to be held in many states apart from Lok Sabha next year, the government will not take the risk of reducing the interest on PF too much.
Where does EPFO invest the money of the employees?
EPFO invests the PF money of the employees in many places. Only a part of the earnings from this investment is received by the employees in the form of returns. EPFO invests 85 per cent of the money in debt options, which include government securities and bonds. While 15 percent of the money invests in ETF.