How much did the PF account holders suffer? | EPFO to pay 8.1% interest rate on PF for 2021-22.

Employed people face a big blow in the interest rate on PF Accounts:

If the common man wants to buy something, then fill more money because inflation is on the seventh sky. If the common man wants to deposit money in the bank, then the savings rate will be 3 to 4%. That is, just how much inflation takes money out? There is not even that much money in the savings account and now the common man has deposited money in the PF in the name of a provident fund from his salary. 

Reducing the interest rate by EPFO ​​​​will get less money. Now you will get 8.1% interest on the amount deposited in the PF account instead of 8.5%. The rate of interest on PF deposits is the lowest in 40 years. For the last two months, interest on PF was getting at the rate of 8.5%. Around 6 crore employees of the country have come under PF. Deduction of interest on PF deposit is considered a big setback for the employed people. 

Employed people keep the amount deposited in the PF account for the future. Under the EPFO Act, 12% of the basic salary and dearness allowance to the employees goes to the PF account, then the same company also contributes 12% of the basic salary and dearness allowance of the employee in the PF account. Out of the 12% contribution of the company, 3.67% goes to the PF account of the employee and the remaining 8.33% goes to the employee pension scheme.

Now let us explain to you in easy language how much difference it is going to make to you due to the reduction in the interest rate on the PF account. Let us explain this change to you with an example. Suppose, If you have a total of ₹ 5 lakh amount deposited in your PF account till March 30, 2022. In such a situation, if you get the interest at the rate of 8.5%, then you get ₹42,500 as interest on ₹5 lakh, but now this interest rate has been reduced to 8.1%, then now you will get ₹ 40,500 as interest on ₹5 lakh.

That is, you will get ₹2,000 less interest for the whole year. There was a time when 12% interest was available on the PF account. From 1989 to 1999, the interest of 12% was available on the PF account. After that, the interest rate started falling. After 1999, the interest rate never reached close to 10%. Since 2000, it has remained below 9.5%. It was 8.5% or less in the last seven years. The reduction of interest on PF is a big blow as it directly affects your retirement fund. 

After fixing the interest rate on PF, the interest for the entire financial year will also come into your account . Today there is no news which you can consider good, it can be bad, but the news is not good. The account holders of EPFO by the Government of India, those who are working in government or private companies, the money deducted from their salary and their employers deposit some percentage of money in PF account i.e. called Provident Fund. 

And it has been approved to pay 8.1% interest on the deposited amount. The Employee Provident Fund is an organization as a general trust recognized by or with the EPFO. The money that was deposited for the year 2021-22 will now go into the accounts at the interest rate of 8.1% on that money for the whole year.

The government reduced the interest rate on Provident Fund:

It is not that the decision was announced today, the decision was taken earlier. The EPFO board had approved an interest rate of 8.1% and from there the government has now approved that the money will be transferred to the account with new interest rate. There is good news, but the rate which is there is very bad news, it has come at an interest rate of 8.1%.

This is the lowest interest rate in over 40 years. Although One Person 8.1% on Employee Provident Fund even today you get a better interest rate than all other instruments available in the market. You can probably earn better than this by investing money only in the stock market, which is a safe investment with safe interest than EPFO ​​or associated with it.

PF account where you invest money in these two, you get good interest, but now it has been at the bottom in 40 years. This should be noted and it is a matter of concern. Last year, for 2020-21, the rate was 8.5%. From there it has been reduced to 8.1% and this time the government has approved it.

At a time when interest rates are rising everywhere, then if the interest rate here comes down. It used to get 8% interest on PF accounts in 1977-78. In 1977, the year when a non-Congress government was formed in this country for the first time, was a Janata Party government. Then 8% interest rate came into Provident Fund and after that, it has been almost 40 years now.

It is more than that when it has come in at 8.1% and it was 8.5% for 2021. This too was decided in March 2021. After that the rate was fixed in October, but here is the question. Before the EPFO had reduced this rate for 2019-20 also, it was 8.55% in 2018-19. From there it was reduced to 8.5%, which was the new low of seven years at that time.

If you look at the recent times, in 2012-13, the rate has been 8.5%. After that, it was came again high which if you look at the rate was 8.8% in 2015-16. From there it continues to fall. But despite all this, the specialty of EPFO should be kept in mind. If you are doing a job in which your provident fund is deducted, then always pay attention to the name of the provident fund. This is the fund for your future. Don't make the mistake of removing it. 

Even at this time, people who have work in their own hands and they have not withdrawn their money from there. Even if he has lost his job, then after leaving the job for three years or after retirement, you can continue to take an interest at the same rate for three years. If you do not have much of your need and if you do not have any better earning opportunity than this, then you should stick to this interest rate of EPFO ​​as it is also tax-free.

Also, provided the new rule that has come, the contribution of more than 2.5 lakh rupees, will be taxed. If you opened two different accounts, then there is no tax-free earning. So, don't fall into his trap, and Looking at today's date this is not a bad earning of 8.1%. however, interest rates are increasing.

In such a situation, it is worrying that the point of four percent has come down. 8.5 to 8.1% but this is not a big blow because it was announced earlier. The news of relief at this time is that the amount is coming into your account. You will check your passbook after a few days and nowadays you do not have to check your passbook.

Check your details on the EPFO portal, there is the UAN number. If you see that and you log in through it, then you regularly see how much amount is in your PF account and if you have worked for more than 10-12 years and have got PF deducted, then by seeing that amount you will happy. If it has been 15 years to 20 years, then there is more happiness.

That's why I say that when you leave a job, say in three years, you have left one job and got another job, then do not fall into this affair, which is usually advised by HR department people there. Some people suggest that withdrawing this money and opening a new account there, does not give you much benefit.

You feel that the money has come in hand, but that money has been spent. The good thing is to transfer that money to your next employment money, by staying with you for a long time and you also get the pension from those benefits later and the pension scheme associated with it.

A small amount is not much, but it is available and the PF money would have been increasing for you. They convert into huge sums of money which he then finally retires after 25-30 years of service. At that time, if you have saved your provident fund for the whole time, then you can understand how much amount you have saved.

We hope you like this article and the important information about the provident fund. If you have any questions, please comment on our site www.tradeipohub.co.in. Thanks for reading.