Representational image. Image credit: BizMan

The Central Board of Trustees (CBT) of Employees Provident Fund Organisation (EPFO) has recommended an interest rate of 8.5 per cent on provident funds for Financial Year 2019-2020.

This is the lowest rate in over five years.

The decision to lower the interest rate was taken after a CBT meeting on Thursday.

The previous lower interest rate on employee provident fund (EPF) deposits was 8.65 per cent during the previous financial year of 2018-19.

The labour ministry now requires the finance ministry’s concurrence on the matter.

Now since the Centre is the guarantor, the finance ministry has to vet the proposal for EPF interest rate to avoid any liability.

The EPFO provided 8.65 per cent interest rate for 2016-17 and 8.55 per cent in 2017-18.

The interest rate was slightly higher at 8.8 per cent in 2015-16.

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