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Home >Money >Personal Finance >EPF account: 6 crore members of EPFO to get interest for 2019-20 in 2 intalments
During the 5-month period, from April to August, EPFO has settled 94.41 lakh claims,
During the 5-month period, from April to August, EPFO has settled 94.41 lakh claims,

EPF account: 6 crore members of EPFO to get interest for 2019-20 in 2 intalments

  • The EPFO had announced 8.5% interest rate for 2019-20
  • The rate of interest for 2018-19 was 8.65%.

The six crore subscribers of retirement fund body EPFO will receive interest for 2019-20 on their EPF or employee provident fund accounts in two instalments. The EPFO board had earlier in March decided to provide 8.5% interest rate for 2019-20. Today, the EPFO decided to credit 8.15% interest for 2019-20 into the subscribers account first and then credit the remaining 0.35% rate of interest by December this year.

The coronavirus pandemic and the market choppiness had hit the expected earnings as estimated by EPFO in March.

The rate of interest of 8.5% announced by the Central Board of Trustees surely will provide a cheer to the common man and is a welcome move from the perspective of individual members. However, meeting such a rate could pose a challenge for companies having Private PF Trusts who may not be able to generate adequate returns to meet this rate of interest especially given the covid times.

"The rate of interest of 8.5% announced by the Central Board of Trustees surely will provide a cheer to the common man and is a welcome move from the perspective of individual members. However, meeting such a rate could pose a challenge for companies having Private PF Trusts who may not be able to generate adequate returns to meet this rate of interest especially given the covid times," said Divya Baweja, partner, Deloitte India.

Here are 5 things to know:

The rate of interest for 2018-19 was 8.65%. The EPFO had been settling claims at higher rate of interest of 8.65%. As per practice, the EPFO settles an account at the latest ratified rate of interest available.

The EPFO had provided 8.65% interest rate to its subscribers for 2016-17 and 8.55% 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 2014-15.

During the 5-month period, from April to August, EPFO has settled 94.41 lakh claims, disbursing about 35,445 crore to its members.

To help its members tide over the liquidity needs during the covid crisis, EPFO fast tracked settling of COVID19 advances and illness related claims. It introduced auto mode of settlement for these two categories of advances. Auto mode of settlement reduced the claim settlement cycle to just 3 days for most claims in these two categories against the statutory requirement to settle claims within 20 days.

"While there was an increase in the number of advance claims, there was a significant decline of about 35% in the number of final PF settlement claims from April-August 2020 period as compared with April-August 2019. Final PF Settlement claim allows members to withdraw their PF balance after quitting their job, superannuation, termination or at the time of retirement," EPFO said in a statement.

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