EPF Subscribers may Get 8.8% Interest for 2012-13

The Employee’s Provident Fund Organisation (EPFO) is likely to announce 8.8% interest on retirement savings for the year 2012-13 which is significantly higher than 8.25% set for the previous financial year 2011-12.

According to a senior official of EPF, due to the tremendous pressure and expectation from EPFO, it can take up to 8.8% to match the interest rate on Public Provident Fund (PPF). Previous calculations were worked out to 8.6% return for 2012-13, the increased payout will be possible by using returns on inoperative accounts and deposits that have Rs 22,000 crore.

A member of Central Board of Trustees (CBT) says, interest rate of 8.6% is not acceptable when other schemes such as PPF are giving higher returns. It should be at least 8.8% returns, if not 9%.

The EPFO is now managing a corpus of over Rs 3.5 lakh crore, but it had a deficit last fiscal and was forced to announce rate cut of 1.25% to 8.25% return from 9.5% return which was offered in 2010-11.

Source: The Financial Express