? Cool Title, but what’s the news?
The EPFO has asked its field offices to credit 8.55% rate of interest for 2017-18, the lowest rate since 2012-13 fiscal, into the PF accounts of around 5 crore subscribers.
? Okay, but what does it mean?
The finance ministry had ratified 8.55% rate of interest on EPF for the last fiscal. But it could not be implemented because of model code of conduct for Karnataka elections. The EPFO had provided 8.65% interest for 2016-17. The members got 8.8% in 2015-16 and 8.75% each in 2014-15 and 2013-14. In 2012-13, EPFO had provided 8.5% rate of interest on EPF. Thus, at 8.55% for 2017-18, it is a five year low.
? Why should I care?
For people who are trying to build wealth for their retirement, this might come as a deterrent to continue investing in a Provident Fund account. People might start looking for other options that offer higher returns in the longer run. Starting a SIP for retirement planning is becoming a more viable option that people might now start exploring even more, since it has proven to offer higher returns in the longer run.
Source: Hindustan Times