At times three per cent and sometimes even 12 per cent interest was received on PF, know how the rates have changed so far?



Then the interest rate on the PF account was fixed at three percent, after that it changed continuously and it was fixed from a low level of three percent to a high level of 12 per cent. Let us know when and how these rates were changed.


The employees engaged in the preparations for holi were expecting a gift from the government, but instead they got a big setback. In a two-day meeting of the Central Board of Trustees (CBT) of the Employees' Provident Fund Organization (EPFO), the interest rate on EPF deposits has been reduced to 8.1 percent. Talking about the history of EPFO, till now many changes have been seen in it year after year. Sometimes the lowest three percent, and sometimes the highest 12 percent interest was given on this.



Establishment of EPFO in 1952

The Employees' Provident Fund Organization was established in the year 1952. Let us tell you that EPFO is a government organization providing a state promoted compulsory contributory pension and insurance scheme in India. It is the largest organization in the world in terms of members and financial transactions volume. Its powerful body decides on CBT interest rates. It is headed by the Union Labor Minister. The Labor Secretary of the central government is its Vice-Chairman. It consists of 5 representatives of the central government and 15 representatives of the State Governments. It also includes 10 representatives of employees and 10 representatives of employers.


The rate was fixed at 8.5 percent so far

Till now the EPF interest rate was fixed at 8.5 percent, which has been reduced to 8.1 percent. According to a report, the rate here is the lowest in more than four decades. Earlier in 1977-78 it was at 8 per cent. However, if we look at the inception of EPFO, then the interest rate on PF deposits was fixed at the lowest three per cent in 1952-53, while it was the highest level at 12 per cent from 1990 to 2001. We are telling you in which financial year from the beginning of the organization till now, at what rate did the government give interest on PF to the employees.



Initially 3% interest

When the Employees' Provident Fund Organization was started, at that time i.e. in the financial year 1952-53, the interest rate on PF was fixed at three percent. After this, interest continued to be received at the same rate till 1954-55. Then it was changed in 1955-56 and till 1962-63 it was in the range of 3.50 per cent to 3.75 per cent. In 1963-64 it was increased to four per cent and by 1966-67 it was in the range of four to 4.75 per cent. From the financial years 1967-68 to 1971-72, it ranged from five per cent to 5.80 per cent. After this it was increased to six per cent in 1972-73 and to seven per cent in 1975-76.


40 years ago 8 percent was fixed

Let us tell you that after the cut on Saturday, the interest rate of 8.1 percent, set is the lowest in the last four decades. Actually, in the financial year 1977-78, the interest rate coming into the PM account was increased to eight percent. Till 1982-83, it remained within the range of eight. It was again raised to 9.15 per cent in 1982-83 and remained at 9.90 till 1985. With the passage of time, the government increased it continuously, giving relief to the employees. It was increased to double digits for the first time in the financial year 1985-86. At that time the PF interest rate was fixed at 10.15 percent.



12 percent interest rate for 12 years

This trend of increasing PF interest rates did not stop here and in 1986-87 it was reduced to 11 per cent, which lasted till 1989. Then came the opportunity for the highest interest rate. Yes, giving a gift to the employees, the government increased the interest rates to 12 per cent in 1989-90. This high rate remained fixed for 12 years i.e. till 2000-01. But in 2001-02, a major change was made and the interest rate was reduced to 9.50. Then the process of reduction in PF interest rate which started is going on till now. However, some relief was given in between.



In the financial year 2005-06, the interest rate was again reduced and it came down to eight. It remained stable at 8.50 till 2009-10. After this, in 2010-11, once again there was a jump in it and it was reduced to 9.50. But this rate remained fixed only for one year and was reduced to 8.25 in 2011-12. Since then, this interest rate has been rotating in the range of eight only. It was again increased to 8.80 in 2015-16 during the tenure of prime minister Narendra Modi. Now again it has reached the level of 40 years old.

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