- Date : 04/04/2023
- Read: 3 mins
The new interest EPF rate is now 8.15%, which was earlier 8.10%.
On March 28, 2023, the Employee Provident Fund Organization or EPFO, raised employee and employer EPF contribution interest rates. The new interest rate is now 8.15% compared to the earlier 8.10%. Now, what does this mean for you?
Let's first have a look at EPF interest rates over the last decade:
EPF Interest Rates in the Last 10 Years:
EPF and Its Importance
In 1952, the EPF was launched as the primary scheme under the Employees' Provident Funds and Miscellaneous Provisions Act. It is handled by the larger governing body of the EPFO or the Employees' Provident Fund Organisation. If you work in a company with over twenty people, you must contribute a certain amount of your monthly salary towards the EPF scheme. Your employer simultaneously matches this amount. When you retire, your contribution over the years, along with your employers plus the interest earned on this amount, is yours for the taking as a lumpsum amount.
Also Read: A step-by-step guide to online EPF transfer.
Interest Rate
An EPF account receives interest on its balance each year. The interest rate was 8.10% earlier, which has increased to 8.15% annually.
Withdrawal
An employee can withdraw the total EPF account balance upon resignation or retirement. However, there are certain conditions that the employee must fulfil. Some allowances to withdraw on your EPF include education costs, home buying, or medical emergencies.
Tax Benefits
Contributions to the EPF are eligible Under Sec 80C for tax benefits. The withdrawn amount and earned interest are tax-free in some situations.
UAN (Universal Account Number)
Every employee gets a Universal Account Number (UAN). This unique number can help you keep track of your EPF account and monitor its growth.
Online Service
The EPFO portal allows you access to all your account activity. This portal will enable you to access services such as withdrawals, account statements, and balance inquiries.
ETF vs Other Investments
How to Check Your EPF Balance
You can check your EPF balance in several ways, such as:
Through SMS -
Send sms to a dedicated number - 7738 2998 99, from your registered mobile. Keep your UAN number handy to check your PF balance. Your mobile number needs to be linked, and the necessary checks, such as eKYC, are already completed for smooth access to your account.
Missed Call
Using your registered mobile number, you can just leave a missed call on 011-2290 1406. If your number has been linked and the eKYC completed, you will receive the balance information in your PF account.
How Will the Hike Affect Subscribers?
When you compare the increase, it is a 0.05% increase in interest rate. While this may not seem staggeringly high, it does show an encouraging positive upturn in interest rates. Moreover, in the new financial year, this extra 0.05% extra interest rate becomes applicable to your current balance - a welcome addition to most investors.
Another point to note is that this increase in interest is tax-free. An 8.15% tax-free interest rate is music to the ears of most investors, and experts similarly concur. This interest hike fares well compared to other fixed deposit rates or small savings schemes. If you wish to maximise your gains with this interest hike, the professional recommendation is to diversify your portfolio and EPF. Investing in NPs or mutual funds can contribute significantly to overall growth.
On March 28, 2023, the Employee Provident Fund Organization or EPFO, raised employee and employer EPF contribution interest rates. The new interest rate is now 8.15% compared to the earlier 8.10%. Now, what does this mean for you?
Let's first have a look at EPF interest rates over the last decade:
EPF Interest Rates in the Last 10 Years:
EPF and Its Importance
In 1952, the EPF was launched as the primary scheme under the Employees' Provident Funds and Miscellaneous Provisions Act. It is handled by the larger governing body of the EPFO or the Employees' Provident Fund Organisation. If you work in a company with over twenty people, you must contribute a certain amount of your monthly salary towards the EPF scheme. Your employer simultaneously matches this amount. When you retire, your contribution over the years, along with your employers plus the interest earned on this amount, is yours for the taking as a lumpsum amount.
Also Read: A step-by-step guide to online EPF transfer.
Interest Rate
An EPF account receives interest on its balance each year. The interest rate was 8.10% earlier, which has increased to 8.15% annually.
Withdrawal
An employee can withdraw the total EPF account balance upon resignation or retirement. However, there are certain conditions that the employee must fulfil. Some allowances to withdraw on your EPF include education costs, home buying, or medical emergencies.
Tax Benefits
Contributions to the EPF are eligible Under Sec 80C for tax benefits. The withdrawn amount and earned interest are tax-free in some situations.
UAN (Universal Account Number)
Every employee gets a Universal Account Number (UAN). This unique number can help you keep track of your EPF account and monitor its growth.
Online Service
The EPFO portal allows you access to all your account activity. This portal will enable you to access services such as withdrawals, account statements, and balance inquiries.
ETF vs Other Investments
How to Check Your EPF Balance
You can check your EPF balance in several ways, such as:
Through SMS -
Send sms to a dedicated number - 7738 2998 99, from your registered mobile. Keep your UAN number handy to check your PF balance. Your mobile number needs to be linked, and the necessary checks, such as eKYC, are already completed for smooth access to your account.
Missed Call
Using your registered mobile number, you can just leave a missed call on 011-2290 1406. If your number has been linked and the eKYC completed, you will receive the balance information in your PF account.
How Will the Hike Affect Subscribers?
When you compare the increase, it is a 0.05% increase in interest rate. While this may not seem staggeringly high, it does show an encouraging positive upturn in interest rates. Moreover, in the new financial year, this extra 0.05% extra interest rate becomes applicable to your current balance - a welcome addition to most investors.
Another point to note is that this increase in interest is tax-free. An 8.15% tax-free interest rate is music to the ears of most investors, and experts similarly concur. This interest hike fares well compared to other fixed deposit rates or small savings schemes. If you wish to maximise your gains with this interest hike, the professional recommendation is to diversify your portfolio and EPF. Investing in NPs or mutual funds can contribute significantly to overall growth.
