(FE)
Deposits on employees’ provident fund may continue to fetch 8.65% returns for the second year in a row in the 2017-18 fiscal, labour minister Bandaru Dattatreya told FE. “It is very difficult to speak on the interest rate for the current fiscal. But I hope the 8.65% rate could be maintained,” Dattatreya, who’s also the head of Central Board of Trustees (CBT), the highest decision-making body of the Employees’ Provident Fund Organisation (EPFO), said.
At 8.65%, returns on savings on EPF is its lowest in four years. However, it still remains the most attractive fixed-income investment option. The minister’s take on the possible interest rate is important as he had to keep aside the finance ministry suggestion, considering the falling income of the retirement fund body on its investments, of lowering the rate fixed by CBT for second successive year.
The finance ministry, on its part, has lowered interest rates on debt instruments such as PPF, National Savings Certificates, Kisan Vikas Patra and Post Office Time Deposits. In 2015-16 too, overturning the CBT’s decision to pay 8.8% interest for the year, the finance ministry had lowered it to 8.7%, but it had to roll back the decision and retain the rate at 8.8% following vociferous protests by trade unions.
