EPFO may lower interest rate for 2017-18

The Employees' Provident Fund Organisation (EPFO) may lower interest rate on provident fund deposits this fiscal year compared to 8.65 per cent provided to its 45 million members for 2016-17, a labour ministry official said. The EPFO is likely to cut interest rate on the grounds that it is directly crediting exchange trade funds (ETF) units into provident fund accounts and lower yields on other investments, particularly bonds. "Employees Provident Fund Organisation may cut rate of return on provident fund deposits for 2017-18 due to lower income on bonds and its plan to credit ETF investments directly into the account of subscribers," the senior official said. However, the official said the EPFO is still to work out the income projection for the current fiscal year, which would become the basis for crediting rate of interest in subscribers account. Earlier on Thursday, the EPFO approved an accounting policy for valuation and accounting of equity investments which was prepared in consultancy with IIM Bangalore.