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EPF interest rate for Fy 2011-12 has been reduced to 8.25 % from 9.5 %. This has been done when Interest rate on loans and other saving are increasing .Like PPF rate has been increased wef 01.12.2011 by 8.00% to 8.6 % like wise other securities. EPF Interest Rate for Fy 2010-11 was increased by 1 % as some suspense amount has been found by EPFO. But due to reduction in interest rates in securities where EPFO are allowed to invest their money ,it is not viable for them to pay higher Interest rate. 

Further Interest rate for Financial year 2011-12 has been announced when few days are left in the in the financial year and on the one day before the Union Budget 2012. On the other side RBIhas not changed the interest rate ?

The reduction in  interest rate on deposits in Employees' Provident Fund from 9.5 per cent to 8.25 per cent for 2011-12 affecting over 4.7 crore subscribers.

This cut was proposed by the finance ministry and a notification was issued by the labour ministry, official sources said.

The Employees' Provident Fund Organisation (EPFO) had provided 9.5 per cent interest rate to its subscribers for 2010-11 after it found Rs 1,731 crore surplus in its books of account.

The labour ministry had recommended 8.6 per cent rate of interest for this fiscal on provident fund deposits to EPFO subscribers. 

On 14.03.2012 FA & CAO issued a circular to all Regional provident commissioners as under 

It is to inform that the Ministry of Labour and Employment has conveyed the approval of the Central government to credit interest at 8.25 per cent for the year 2011-12 to the account of each member of the scheme. You are accordingly requested to issue necessary instructions to all concerned for crediting the interest to the members’ accounts,'' the EPFO has directed its filed offices in an internal circular issued last evening.
Circular copy is given under.
On the contrary Interest rate on GPF (general provident fund) has been increased to 8.6 % wef 01.12.2012
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EPF INTEREST RATE REDUCED TO 8.25 % FROM 9.5 % Reviewed by RAJA BABU on 4/19/2012 Rating: 5 EPF  interest  rate for Fy 2011-12 has been reduced to 8.25 % from 9.5 %. This has been done when Interest rate on  loans  and other sav...

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