Employees to receive a boost of 8.5% interest on provident fund for 2019-20

The year 2020 has been tough for working individuals with pay cuts and uncertain future looming large on the professional front. Now in a major boost, private sector employees  will soon get the declared interest rate of 8.5 per cent on their Employees’ Provident Fund (EPF) savings for the financial year 2019-20 at one go. According to a  Business Standard report, the Employees' Provident Fund Organisation (EPFO) made the decision after receiving higher-than-expected returns on equity investments in December. 

The Central Board of Trustees (CBT), on September 9, approved the PF interest rate of 8.5 percent for subscribers but said it would be paid in two tranches - 8.15 percent and 0.35 percent.Out of the contributions received, the EPFO invests 85 percent in fixed-income instruments and 15 percent in equity through exchange-traded funds (ETFs). Benchmark Indian indices have been performing well, with Sensex crossing 45,000, and the Nifty50 surpassing 13,250 for the first time in the first week of December. A separate report by Mint suggested in September that the EPFO had received negative returns on its investments of slightly over Rs 1 lakh crore in ETFs.