Overview on EPF Interest Rate, How to calculate Employment Provident Fund Interest Rates, EPF Interest Rate Lowered to 8.5% for FY2019-20. EPF has reduced 15 basis points.Calculate Interest on EPF.
If you are interested to know about the overview of the EPF interest rate. On 6th March, 2020, EPFO has lowered the interest rates on PF deposits by 15 basis points. Now, the EPFO has fixed the interest rate to 8.5% for the financial year 2019-2020. This is the interest rate that changes and reviewed every year at the end of the financial year. And if you searching for the EPF interest rate for the financial year 2017 – 2018 then you are at the right place. Go on and find out the EPF interest rate along with a little brief description about EPF.
EPF which means Employee Provident Fund is a scheme where the employee and employer equal amount towards employees account. Employee will contribute 12% of his basic salary and employer contributes 12% of employees salary. But employers contribution of 12% goes into 2 things that is out of 12% the percentage of 8.33 is towards EPS and remaining 3.67% towards EPF. It is the retirement benefit that the employee is availed with. Read the article completely to know more about interest rate.
Employee has an option to withdraw the amount during the service period in case of specific reasons or else he can withdraw the whole accumulated amount at the time of retirement. It is totally depend upon Employee.
For the EPF the EPFO’S Central board of trustees along with Ministry of finance review the interest rate every year. Usually the review on interest rate will be in the month of February which may extended to April and May. But in fact the review should be at the end of the financial year.
Overview of the EPF interest rate
If we look at the trend of interest rate for the financial year 2012 – 2013 the interest rate was 8.5% and then there was an increase in financial year 2013 – 2014 upto 8.75%. But in financial year 2014 – 2015 the interest rate was neither decreased nor increased it stood at 8.75%. In financial year 2015 – 2016 there was a increase upto 8.8%. From 2016 – 2017 financial year starts the decreasing tread where the interest rate goes down to 8.65%. In the next financial year i.e 2017 – 2018 it has further dipped to 8.55%. , and now there was an announcement that it is going to be 8.5% for this financial year2019-20.
Interest rate for the financial year 2017 – 2018 8.55%. while the EPF interest rate has been decreasing as you can observe the EPF interest rate for the financial year 2016 – 2017 is 8.65% and if go further back the EPF interest rate for the financial year 2015 – 2016 is 8.80%. In 1989 – 2000 it was noted to be the highest interest rate reviewed and the the rate of EPF interest is 12%.
EPF interest will be calculated every month but the EPF interest will be deposited only at the end of financial year that is on 31st March for all the months.
Depending on the entity the contribution of EPF will change. As in case of entity with less than 20 employees or for the industries like jute, beedi, brick, Coir and Gaur gum the employee will make lower than 10%.
Usually the contribution of the employer will be like 8.33% towards Employees Pension Scheme account of the employees and 3.67% towards Employees Provident Fund account of the employees and 0.50% towards Employees Deposit Linked Insurance account of the employees. It means as a whole and in a simple way depending on the entity EPF contribution is of 2 things that is Employees contribution and employers contribution.
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In every year EPF Interest rates may vary. So, keep visit our website at epfindia.site for more updates/ you can also check the EPF official website at epfindia.gov.in