Interest on PF is likely to decline from 8.65 percent this year to 8.50 percent this year

New delhi date. February 28, 2020, Friday

This year, salaried individuals are likely to receive less interest on their PF deposit. Interest rates may be reduced as the return on investment from the Employees Provident Fund Organization (EPFO) is reduced.

EPFO plans to reduce interest rate on PF deposits by 15 basis points to 8.50 percent for FY 2020. The issue is likely to be discussed at the March 5 meeting of the Central Board of Trustees of the EPFO.

According to sources, it will be difficult for EPFO ​​to keep interest rates unchanged this year. He said that due to long term fixed deposits, bonds and government securities, EPFO's revenue has dropped by 50 to 80 basis points in the last one year.

The Finance Investment and Audit Committee may take a decision before the Board of Trustees meeting on the return rate on PF deposits. This decision will be made on the basis of the actual financing of the EPFO. The decision will be informed and considered at a board meeting.

EPFO has invested over Rs 18 lakh crore. He had invested around Rs 4,500 crore in Dewan Housing Finance Corporation and Infrastructure Leasing and Financial Services.

The investment made by these two companies has become a burden to the EPFO. DHFL is going through a bankruptcy resolution process on the one hand while work is under way to protect the IL&FS.

EPFOs invest 85% of their annual funds in the debt market and 15% in ETFs and equity. EPFO's total investment in equity at the end of March last year was Rs 74,324 crore and it received a return of 14.74%.