Revised (2012-13) interest rate of Employees Provident Fund (EPF)

Labour Minister confirmed that for current fiscal, interest on Employees Provident Fund is fixed at 8.5%. Previously for the years 2010-11 it was 9.5% and for 2011-12 it was 8.25%. So as was hope from all it is now 8.6%  which is really beneficial to salaried class.

But when you compare with Public Provident Fund (PPF) interest rate which is 8.8% for current year, it looks bit low. Only relief for the subscribers of EPF is that-Social Welfare emotion attached with it. Hence government will also play safe in investing and distributing it to beneficiaries.

We cant say the same increasing trend will continue in future also as rate revision on both the schemes revised yearly. But for tax benefit point and safer heaven of investments, still both EPF and PPF holds best options to Indian non risky investors. In terms of investment EPF holds good as your employer too will contribute upto 12% of your salary and if you wish you can voluntarily contribute more to build a retirement corpus. But as EPF is defined contribution plan, it is associated with few risks too. Those are-It is difficult to build a good corpus for the employees who start their profession lately and participants will bear the risk of investment which you can notice by the yearly changes of EPF rates.

So once again I am repeating the same line (keeping in mind of voluntary contributors of EPF) -Plan your goal and accordingly choose the options in which you want to invest based on your risk appetite.  Happy Investing !!! :)

Click Here to view the announcement about the same in a daily.

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Comments

  1. Rahul Jadhav says

    Hello Basavraj,

    I have following two queries
    1. The interest what we got is compound or it is simple on our contribution to fund value (excluding interest rates accumlated every year)
    2. If I want to widraw money can I take out whole fund including pension fund accumlated.

    regards

    Rahul

  2. JEGATHEESAN says

    THIS YEAR THEY CHANGED INTEREST RATE TO 8.5%. I NEED TO KNOW HOW THEY ARE CALCULATING IN OUR CONTRIBUTION AMOUNT SIR. PLEASE HELP ME IN THIS

  3. prashantdkiller says

    hey basu. thanks for the information provided. i wanted to know that this interest rate is applied in which month?? i expect it around march or april [transition of financial year] . or it follows some other trend??

  4. ashok says

    NO…………………For F.Y.2012-13 – The EPFO department pay Interest @8.25% p.a. on the Final Settlement payment. The EPFO was not accountable for Declaration of Minister. Only Gazatted Notification is permissible and as on date the FM have not issued any notification for increase in Interest Rate of EPF for F.Y.2012-13 as @8.6%. However the misiter only raised their voice for cheap publicity stunt. This F.Y. Interest receved by our College is 8.25% from EPFO.

    • BasuNivesh says

      Monika-I shared the information which I found from news articles. This was the statement issued by concerned minister in parliament.

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