Employees Provident Fund (EPF) has been a popular investment option for all salaried class in India. While it has been a forced investment option, willingly or unwillingly many people save a lot for their future in this scheme. A lot of Indians do not even have any other savings apart from what is deducted and saved in their EPF Account. While many do not understand whether it is good or bad investment, we all know and are assured that we have EPF money for retirement/ emergency/ education/ medication and what not. This is lifetime savings for most of salaried middle class.
This scheme provides assured returns unlike other volatile instruments. The funds are managed by EPFO, a government body. Recently government has announced the EPF interest rates for FY21-22 which is not much encouraging than what was offered before. The falling interest rate trend of EPF since last two decades has been a concern for the vast salaried class.
Check out the EPF Interest Rate trend for last 20 years below.
EPF funds are not managed efficiently by the government to generate good returns. This being a retiral fund, government also do not allow EPFO to invest a major portion of it in equity. However, looking at the present interest rate trend of Fixed Deposits, EPF investors will have some cheer. While the best annual FD interest rates in market offer around 6.50-7.00%, EPF still announced 8.10% for the current financial year. In present markets, EPF rates still look way ahead among all assured return products.