In this article, FinTuts will share its views or insights about 8.5% EPF interest rate to be credited in One Installment into around 190 million EPF accounts for FY 2019-20 for private sector employees.
Summary || EPF Interest Rate || FY 2019-20
Earlier in September 2020, citing exceptional circumstances arising out of Covid-19, the central board of trustees (CBT) had recommended the EPFO to split payment of the interest rate of 8.5 percent into two parts(8.15 percent & 0.35 percent).
The EPFO took the decision in a smart way, luckily after receiving higher than expected returns on equity investments in December 2020 which would leave the EPFO with double the surplus projected three months back in September 2020.
Due to the sharp rise in the stock markets in October, November, and December 2020, EPFO has been able to liquidate its equity investments at profit.
The EPFO invests 85 percent in fixed-income instruments and 15 percent in equity through ETFs from the contributions received.
EPFO had given 8.65 percent interest in FY2018-19. It has been noted that the EPF interest rate is at a seven-year low at 8.5 percent for FY2019-20. But the fall in EPF interest for FY2019-20 seems to be much lower than the overall fall in the market interest rate on similar products because of the Covid-19 pandemic.
We hope that this article might have surely helped you to understand in general about the 8.5% EPF interest to be credited at one go for FY 2019-20 for private sector employees.
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Sumit Kalaria is the person behind FinTuts.in. He is actively engaged in finance blogging, not associated with any financial product or service provider. The main focus of his blog is to make investment simple by helping investors to make informed financial decisions.