The Modi government announced the Diwali bonanza for the government employees on Tuesday, by increasing the rate of interest for General Provident Fund (GPF) and other related schemes by 0.4 percentage points to 8 per cent for the October-December quarter. The rate is in line with that for the Public Provident Fund and would be applicable on funds of the Central government employees, defence forces and Indian railways.
The interest rate on GPF was 7.6 per cent for the July-September quarter of 2018-19. “… during the year 2018-2019, accumulations at the credit of subscribers to the General Provident Fund and other similar funds shall carry interest at the rate of 8 per cent with effect from October 1, 2018, to December 31, 2018,” a Department of Economic Affairs’ notification said.
Here are 5 things you must know about it –
1. General Provident Fund or GPF is only available for government employees. The interest rate on these funds is revised by the government from time to time.
2. According to the details provided on pensionersportal.gov.in, all the permanent government employees, re-employed pensioners (other than those eligible for admission to the contributory provident fund) and temporary government servants after a continuous service of one year are eligible to subscribe to GPF. However, it is not applicable for government employees who have joined on or after January 1, 2004.
3. At the time of joining the fund, the subscribers need to make a nomination, conferring on one or more persons the right to receive the amount that may stand to his credit in the fund in the event of his death.
4. The subscriptions are on a monthly basis expect the period when an employee is under suspension. Also, the subscriptions are stopped three months prior to the date of superannuation.
5. The government has relaxed the norms for withdrawal of amount and no documentary proof is required to be furnished by the subscriber for the GPF withdrawal. The subscribers also don’t need to submit an application for final payment from the fund.
Earlier in September, the government had announced that the interest on small savings, including NSC and PPF, will be hiked by up to 0.4 percentage point for the October-December quarter, to align it with the rising deposit rates in the banks.