In comparison, The Employees’ Provident Fund Organisation (EPFO) offered its subscribers an interest of 8.65% in 2018-19 fiscal
Government employees counting on a hike in their provident fund interest rates will be disappointed. The government has kept the interest rate on 10 such provident funds unchanged at 7.9% for the January-March quarter.
These rates apply to The General Provident Fund (Central Services), The Contributory Provident Fund (India), The All India Services Provident Fund, The State Railway Provident Fund, The General Provident Fund (Defence Services), The Indian Ordnance Department Provident Fund, The Indian Ordnance Factories Workmen’s Provident Fund, The Indian Naval Dockyard Workmen’s Provident Fund, The Defence Services Officers Provident Fund and The Armed Forces Personnel Provident Fund.
The Budget Division of Department of Economic Affairs, under the Ministry of Finance, has recently issued the notification that the fund accumulation at the credit of subscribers of General Provident Fund (GPF) and other similar funds will carry an interest rate of 7.9% for the period January to March 2020. The interest rates for the previous quarter also stood at 7.9%.
This seems to be in line with the government decision to retain the 7.9% interest rate for small savings schemes such as the Public Provident Fund (PPF), National Savings Certificate (NSC) for the quarter ending March 2020.
In comparison, The Employees’ Provident Fund Organisation (EPFO) offered its subscribers an interest of 8.65% in 2018-19 fiscal but it is expected that the rate will be lowered when EPFO announces its 2019-20 rate of interest.
All government employees, who joined service on or before December 31, 2003, contribute to GPF. An officer/employee contributes 6% of his/her basic salary with an equal contribution from the Government. So, a government employee becomes a member of GPF by contributing a certain percentage of their salary to the account, which is mandatory except during the period when the employee is under suspension. Subscriptions to the GPF are stopped 3 months ahead of the date of superannuation.
It was in July 2019 when the government lowered the interest rate on GPF and other funds to 7.9 %, a drop of 10 basis points, for the period starting July 1 and ending on September 30.
Subscribe & keep learning!