New Delhi: Retirement fund body EPFO announced an increase in the interest rate of 8.55 per cent on PF deposits for 2018-19, to 8.65 per cent. This is the first increment announced by the EPFO since 2016. The decision was taken in the Employees' Provident Fund Organisation (EPFO) trustees meeting on February 21, 2019.

Earlier sources had claimed that this year too, the EPF interest rate would be retained at 8.55 per cent as provided in 2017-18 as Lok Sabha elections are around the corner.

The Central Board of Trustees (CBT) headed by Labour Minister is the apex decision making body of the EPFO which finalises rate of interest on PF deposits for a financial year. Once approved by the CBT, the proposal is required concurrence of the Finance Ministry. The interest rate is credited into the subscribers account after the Finance Ministry's approval.

The EPFO had provided a five-year low rate of interest of 8.55 per cent to its subscribers for 2017-18. The body had kept the interest rate at 8.65 per cent in 2016-17 and 8.8 per cent in 2015-16. It provided 8.75 per cent interest for 2013-14 as well as 2014-15. The rate of interest was 8.5 per cent in 2012-13. The EPFO trustees can also announced the appointment of new fund managers.  The trustee would also review the performance of investments made by the body in stock markets.

The EPFO had started investing in the ETFs (exchange traded funds) in August 2016. Presently it invests 15 per cent of its Rs 1.5 crore investible deposits at hand every year in ETFs. It has invested around Rs 50,000 crore in ETFs so far.