Provident fund interest rate raised to 8.5%

Finance minister P Chidambaram did not offer much to the salaried class in his budget but his ministry on Wednesday increased the interest rate on provident fund by 0.25%.

Finance minister P Chidambaram did not offer much to the salaried class in his budget but his ministry on Wednesday increased the interest rate on provident fund by 0.25%.

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The ministry notified interest rate of 8.5% for 2012-13, up from 8.25% the previous financial year. The nominal increase would benefit around five crore provident fund account holders.

“The notification will be implemented with immediate effect,” said Anil Swarup, central provident fund commissioner, Employees’ Provident Fund Organisation (EPFO). It means that the interest rate would reflect in subscribers’ accounts within a few days.

The EPFO had in February asked the finance ministry to notify 8.5% interest rate for 2012-13. Normally, new rates are notified before the end of a financial year but in the last few years, there has been a delay in notification.