EPF Interest Rate Fixed At 8.5%

Over four crore subscribers of the Employees Provident Fund (EPF) will earn 8.50 per cent interest on their deposits for the year 2006-07, with the Centre notifying the rate recommended by the EPF Board. The Central government has notified the rate of interest for the year 2006-07 at 8.5 per cent, Central Provident Fund Commissioner A Viswanathan said.The Central Board of Trustees of EPF had, in July, recommended the 8.5 per cent rate, despite opposition from trade unions that were seeking higher returns at a time when even bank fixed deposits were paying attractive interest rate.Commercial banks offer up to 9.5 per cent returns on fixed deposits depending on tenure. However, banks have begun cutting rates as they are flush with funds and credit offtake is slow.

The same rate of 8.5 per cent was paid to EPF subscribers in 2005-06. Viswanathan said all the regional fund commissioners have been instructed to immediately give effect to the decision and issue at the earliest, the annual statement of accounts for 2006-07.The 8.5 per cent interest will lead to dispersal of Rs 7,550 crore in the accounts of Provident Fund subscribers but will not result in any deficit for 2006-07.