EPF Subscribers to Get 8.6% Interest in 2012-13

Over 5 crore subscribers of retirement fund body Employee Provident Fund Organisation (EPFO) may likely to get 8.6% interest on their investment in this fiscal.

EPFO had paid 9.5% interest in 2010-11 and dropped interest rate to 8.25% in 2011-12, now it is working on income estimates and planning to provide an 8.6% return for the current fiscal.

According to the officials of EPFO, subscribers could even be paid higher interest rates of about 9% by appropriating returns on Rs 22,000 crore corpus lying in inoperative accounts.

Further, EPFO can provide higher returns in the current year 2012-13 as the government increased interest rate on Special Deposit Scheme (SDS) from 8% to 8.6% with effect from December 1, 2011.

According to the EPFO trustees, it is difficult to maintain a rate of return great than 8.5%, because of low interest rate on SDS. But as interest rates on SDS have gone up, it would be easier to provide interest rate over 8.5% for EPFO subscribers.

Source: The Economic Times