EPFO interest decision rate next month: What happens to interest rates of inactive a/c holders, do they earn it? Know here

Business Feb 15, 2022 0 839 Add to Reading List

As per EPFO rules an account is classified as Inoperative account in which contribution has not been received for 3 years after retirement or permanent migration abroad or in case of death.

New Delhi: EPFO's apex decision-making body Central Board of Trustee will take a call on interest rate on employees' provident fund deposits for 2021-22 in its meeting next month.

In March 2020, EPFO had lowered interest rate on provident fund deposits to a seven-year low of 8.5 per cent for 2019-20, from 8.65 per cent provided for 2018-19. The EPF interest rate provided for 2019-20 was the lowest since 2012-13, when it was brought down to 8.5 per cent. EPFO had provided 8.65 per cent interest rate to its subscribers in 2016-17 and 8.55 per cent in 2017-18. The rate of interest was slightly higher at 8.8 per cent in 2015-16. It had given 8.75 per cent rate of interest in 2013-14 as well as in 2014-15, higher than 8.5 per cent for 2012-13. The rate of interest was 8.25 per cent on provident fund in 2011-12.

The 8.5 per cent interest rate on EPF deposits for 2020-21 was decided by the Central Board of Trustees (CBT) in March 2021. It was ratified by the finance ministry in October 2021 and thereafter, EPFO issued directions to field offices to credit the interest income at 8.5 per cent for 2020-21 into the subscribers' account. Once CBT decides an interest rate on EPF deposits for a fiscal year, it is sent to Ministry of Finance for concurrence.

But what happens to PF Subscribers with inoperative account? Do they earn interest on it?

As per EPFO rules an account is classified as Inoperative account in which contribution has not been received for 3 years after retirement or permanent migration abroad or in case of death. At present, all accounts will earn interest upto 58 years age of a member.

What to do if your account becomes inoperative?

If you are still working in an establishment covered under EPF & MP Act, 1952, you should get the amount transferred into your new account either by online or offline mode. If you have retired then you may withdraw the amount.