There is great news for crores of members of Government Employees Provident Fund Organization (EPFO). The government is looking to set up an ‘Interest Stabilization Reserve Fund’ aimed at ensuring stable interest rates for over 6.5 crore EPFO members. This fund is designed to shield Provident Fund (PF) returns from the ups and downs of the market.
How’s it going to work?
A report mentions that the Ministry of Labor and Employment has kicked off an internal study on this. Once it’s done, EPFO members will receive a fixed interest rate in addition to the returns from their investments. This move is thought to be a way to safeguard members from market volatility.
When will these new rules take effect?
Right now, this plan is still in the early stages. It could roll out by 2026-27, pending approval from EPFO’s Central Board of Trustees (CBT). The next EPFO meeting is set for February 28, where they’ll decide on interest rates.
Interest rate fluctuations in EPFO
For the 2023-24 period, EPFO has set the interest rate at 8.25%. Back in 1952-53, it was just 3%, and it peaked at 12% in 1989-90. It dropped to 8.1% in 2021-22 but was later adjusted back to 8.25%.
ATM withdrawals from EPFO accounts
The government is also planning to introduce ATM access for EPFO account holders, allowing them to withdraw funds directly from their PF accounts.
ATM access for PF accounts
Earlier this January, the government announced that EPFO members would soon be able to withdraw money from their PF accounts using ATMs, and they’ll even get a dedicated ATM for this purpose.