Employees Provident Fund Organization - EPFO is likely to retain the old interest rate for the financial year 2017-18.
There were certain speculations that EPFO may reduce the interest rate for this financial year and now the latest update reported the retaining of the same percentage of 8.65.
The actual plan was to credit directly the exchange trade funds ETF units into the provident fund accounts and to reduce the investments on the bond. But the EPFO sold ETF worth Rs 2886 crore and earned a return of 16 percent to Rs 1054 Crore to maintain the same interest this year.
There was a reduction in the percentage last year lowering from the original 2015 rate of 8.8. Since 2015 the EPFO is investing in EPF and till now there was a lack in investing the money directly into the EPF accounts.
Now the trustees are in a process of reviewing the proposal to credit the ETF into the members EPF account due to the lack in financial literacy among the members.