EPFO board meeting is about to start, interest rates may change!
The meeting of the Employee Provident Fund Organization (EPFO) board is going to start shortly. It is believed that a big decision can be taken on the interest rates of EPF accounts in this meeting. However, according to media reports, EPFO may retain the interest rate of 8.25 percent, but some media reports say that there may be a slight increase or reduction in it.
What is the interest rate now?
Let us tell you that the current interest rate of EPF for the financial year 2023-24 is 8.25 percent, which was 8.15 percent before that. At the same time, from 2019 to 2021 it was 8.50 percent, while the highest interest rate till date was 12 percent in 2001.
How does your contribution to EPF work?
If you are employed, then every month 12 percent of your basic salary and dearness allowance is deposited in the EPF account. Along with this, your employer i.e. the company also contributes the same amount, but 8.33 percent of it goes to the Employee Pension Scheme (EPS), and the remaining 3.67 percent is added to the EPF. The government has made EPF membership mandatory for employees earning less than 15,000. This means that every person falling within this salary limit must have a PF account.
How is EPF calculated?
Suppose your basic salary + DA is 14,000.
Your contribution- 12% × 14,000 = 1,680
Employer's contribution (EPF)- 3.67% × 14,000 = 514
Employer's contribution (EPS)- 8.33% × 14,000 = 1,166
Total contribution (EPF + EPF)- 1,680 + 514 = 2,194
Now, if the interest rate of EPF remains 8.25 per cent per annum, then the monthly interest will be 8.25 per cent / 12 = 0.679 per cent
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