Employees' provident fund interest rate for 2021-22 has been slashed from the existing 8.5 percent to 8.1 percent for 2021-22 on Saturday. This is the lowest since 1977-78 when the EPF interest rate stood at 8%.
PF was started in 1952 when the interest rate on PF was only 3%. It has been 8.50% or less for the last seven years. The best time for PF holders was from 1989 to 1999. During this, 12% interest was available on PF. After that the interest rate started falling.
This interest rate reduction is not good news for 6 crore subscribers of EPFO. The recommendations to reduce these interest rates came from the Finance Ministry and were approved by the EPFO.
The Employees' Provident Fund Organisation (EPFO) is the statutory body under the Government of India's Ministry of Labour and Employment, which is responsible for regulation and management of provident funds in India. The EPFO administers the mandatory provident fund.
The EPFO's top decision-making body is the Central Board of Trustees (CBT), a statutory body established by the Employees' Provident Fund and Miscellaneous Provisions (EPF&MP) Act, 1952. As of 2018, more than ₹11 lakh crore (US$157.8 billion) are under EPFO management.