Employee provident fund's interest earnings for FY16 at 8.95%?

Zee Media Bureau

New Delhi: It is likely that employees provident funds will earn 8.95% interest rate, an upgrade  from the previous year's interest earnings of 8.75%.

The Times of India reported that investors in the Employees Provident Fund Organisation's (EPFO) finance panel has recommended raising the interest rate on statutory savings of over 5 crore subscribers from 8.75% to 8.95% during the current fiscal.

However, the interest rate will be confirmed only once the proposal is endorsed by the central board of trustees before the finance ministry notifies it.

The interest rate of 8.95% will be the highest return since the 9.5% paid in 2010-11 and the highest ever real interest rate (after netting out inflation) in recent years.

The report added that an 8.95% rate will translate into returns of nearly 12% for those in the highest slab as the withdrawals and interest earnings do not attract tax at the time of withdrawal.