Modi governments big gift for EPF account holders! Interest rates to be increased in February?

On account of fast approaching Lok Sabha elections in March-April this year, the whole nation is awaiting some big announcements from the Narendra Modi government. For those, we have the good news now. As per Zee Business sources, the Central government is going to announce an increase in the interest rates of EPF, which is currently at 8.55 per cent. This move would give big relief to the near 6 crore employees working in the organised sector.

The decision was taken in the recently held annual review meeting of the Employees Provided Fund Organisation (EPFO). The move would have political meanings too as the decision would affect around 6 crore organised employees availing PF account benefits. The EPFO is developing a special software that would segregate the heads falling under cash and Exchange Traded Fund (ETF) in the PF account of the account holders. The software would also enable employees to increase or decrease their share in exchange traded funds on their will.

The EPFO suggests the PF account holders to chose their ETF investment for a period of five to ten years as long-term investments are expected to give better returns. If we compare the returns on EPF with NSC and PPF, the returns on the EPF is much better. The NSC and PPF have delivered around 7.7 per cent returns in last two years while the EPF gives 8.55 per cent returns, especially when the interest rates have been curtailed in last two years. Recently, Prabhakar Banasure, member, Central board of trustees at EPRO had assured that there was no plans to decrease interest rates on EPFs.