Govt approves 8.1 per cent as interest rate on provident fund deposits for 2021-2022

The labour ministry on Friday notified the 8.1% interest rate on provident fund deposits of the Employees’ Provident Fund Organisation following a go-ahead from the finance ministry. This will pave the way for crediting the interest into the accounts of over sixty million EPFO subscribers in 2021-22 earlier than usual.

In the previous years, interest rate had been generally credited into the subscribers’ account around Diwali or later due to delay in approval from the finance ministry.

The interest rate of 8.1% for 2021-22 is the lowest in more than four decades and is a significant cut from 8.5% credited in 2020-21 and 2019-20. EPFO had credited 8.0% as interest rate in 1977-78. Since then, it has been either 8.25% or more.


The interest rate of 8.1% has been declared based on EPFO’s estimated income for the year at Rs 76,768 crore and this will leave the retirement fund body with a surplus of Rs 450 crore.

The retirement fund body had credited 8.5% in 2019-20 and 2020-21 while it was 8.65% in 2018-19, 8.55% in 2017-18, 8.65% in 2016-17 and 8.8% in 2015-16.

The decision to slash interest rate from 8.5% to 8.1% was taken at the EPFO’s board meeting in Guwahati in March this year. The central board of trustees of EPFO or CBT is a tripartite body involving government, workers and employers’ representatives and the decision of CBT is binding on EPFO. It is headed by the labour minister.

Though EPFO’s corpus has shot up from Rs 8.29 lakh crore in 2020-21 to Rs 9.4 lakh crore in 2021-22, maintaining an interest rate of 8.5% would have left EPFO with a deficit of Rs 3,500 crore.