EPFO Subscribers to Get 8.5% Interest for FY19-20

NEW DELHI: Subscribers of Employees’ Provident Fund Organisation (EPFO) are likely to get the entire 8.5% declared interest rate for FY2019-20 at one go as EPFO has been able to sell its equity holdings and earned higher-than-expected returns in December due to the market rally.

EPFO has now double the surplus projected three months back. Note that both employees and employers together contribute 24% of the basic salary plus dearness allowance every month towards the employee’s provident fund (EPF). Once the interest rate for any financial year is notified, and the current year ends, EPFO calculates the month-wise closing balance in the PF account and then the interest for the whole year.

The monthly running balance is calculated and then multiplied with the interest rate/1200. In case a member is retiring and taking a final settlement and the interest for the current year is not notified, then as per EPFO, interest is credited based on the rate declared for the immediately preceding year. If any sum is withdrawn during the current financial year, interest from the beginning of the year till the last date of the month preceding the month in which withdrawal took place is taken into account.