It’s official: 8.5% EPF interest rate for 2006-07

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New Delhi, Oct 20: Over four crore subscribers of the Employees Provident Fund (EPF) will earn 8.5% interest on their deposits for the year 2006-07, with the Centre notifying the rate recommended by the EPF Board.

“The Central government has notified the rate of interest for the year 2006-07 at 8.5%,” central provident fund commissioner A Viswanathan told reporters here.

The central board of trustees of EPF had, in July, recommended the 8.5% rate, despite opposition from trade unions that were seeking higher returns at a time when even bank fixed deposits were paying attractive interest rate.

Commercial banks offer up to 9.5% returns on fixed deposits depending on tenure. However, banks have begun cutting rates as they are flush with funds and credit offtake is slow.

The same rate of 8.5% was paid to EPF subscribers in 2005-06.

Viswanathan said all the regional fund commissioners have been instructed to immediately give effect to the decision and issue at the earliest, the annual statement of accounts for 2006-07.

The 8.5% interest will lead to dispersal of Rs 7,550 crore in the accounts of provident fund subscribers but will not result in any deficit for 2006-07.

The Employee Provident Fund which has a corpus of around Rs 1,04,000 crore as on March 31, 2007.