The Employees Provident Fund (EPFO) will deposit a total of 8.5 per cent interest on its seven crore shareholder Employee Provident Fund (EPF) accounts for the next seven days, for the next 31 days. Earlier in September, the EPFO, at a meeting of trustees headed by Labor Minister Santosh Gangwar, decided to pay 8.15 per cent and 0.35 per cent interest in two installments.

The labor ministry has sent a proposal to the finance ministry to add 8.5 per cent interest at one time to the EPF for 2019-20, top sources said. The proposal was sent out this month. The finance ministry’s approval for the proposal is expected soon, sources said. In such case, interest will be credited to the shareholder’s accounts before January 1 of this month.

Employees and employers deposit 24% of basic salary and concession allowance in the Employees Provident Fund (EPFO). The EPFO ​​withdraws the interest on the PF and credits it to the beneficiary’s account.

Interest is calculated as follows
If any amount is withdrawn in the current year, the interest amount is taken from the beginning of the year to the previous month of withdrawal. Your Balancing Balance for the year is its initial balance + contribution-withdrawal (if any) + interest is withdrawn.

For example, if the interest rate is 8.65% and the initial balance is Rs 1,12,345 and the PF is Rs 25,000, If the starting balance is Rs 1,12,345, the total monthly balance will be ₹ 11,04,740. The interest would be 1104740 X (8.65 / 1200) = ₹ 7,963. In this way, the closing amount for the year is Opening Balance + Contribution-Withdrawal + Interest ₹ 1,12,345 + 00 1200 – 25000 + ₹ 7963 = ₹ 96,508

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