New Delhi: Extending yet another rejoice to all subscribers of the Employees Provident Fund Organisation (EPFO), the Finance Ministry on Friday approved an 8.5 per cent interest rate on provident fund (PF) deposits for 2020-21 fiscal. 


According to reports, the Finance Ministry took the decision to ratify the interest rate on the recommendation of the EPFO Board. 


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The move is expected to bring cheer to over 60 million subscribers, a week ahead of Diwali, who are expecting interest to be credited to their PF accounts. 


"Approval was received from the finance ministry today. It will be notified as soon as possible," Labour Secretary Sunil Barthwal told Economic Times.


The EPFO falls under the administrative control of Labour Ministry and it has to notify the latest interest rates for the financial year before the retirement fund body credits it into beneficiaries' accounts. 


"The rate of interest on EPF for 2020-21 has been ratified by the Ministry of Finance and now it would be credited into the accounts of over five crore subscribers," a source told news agency PTI.


In March last year, the EPFO had lowered the interest rate on provident fund deposits to a seven-year low of 8.5 per cent for 2019-20, from 8.65 per cent in 2018-19.


The EPF (Employees Provident Fund) interest rate provided for 2019-20 was the lowest since 2012-13, when it was brought down to 8.5 per cent.


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The retirement fund body extended 8.65 per cent interest rate to its subscribers in 2016-17 fiscal and 8.55 per cent in 2017-18.  The rate of interest was slightly higher at 8.8 per cent in 2015-16.


The move, however, will bring down the surplus of EPFO to a mere Rs 300 crore compared to the previous fiscal when it had a surplus of Rs 1000 crore.


The decision to increase the interest rate was approved by the central board of trustees of EPFO in March 2021, but an official approval from Finance Ministry was awaited.