EPF interest rate increases to 9.5% for 2010-2011

POSTED BY Jagoinvestor ON September 19, 2010 COMMENTS (111)

On 15 September 2010, the Employees’ Provident Fund Organisation (EPFO) raised the interest rate for EPF accounts by 1% for 2010-11. The organisation increased the interest rate to 9.5% for 2010-11 from 8.5% in the previous year. This 9.5% is the highest in the last five years. However, one needs to understand that the 1% increase is only for EPF accounts and not for Public Provident Fund (PPF) accounts. A PPF account interest rate will continue to remain 8%. The EPFO is one of the largest provident fund institutions in the world. An EPF is a retirement benefit provided only to the salaried class. Each month, a small amount of money is deducted from an employee’s salary which is invested in his EPF account. The employer also contributes an equal amount.

Note that from 2011, EPF will become the top product in the debt fund category as there is no other “safe” products which gives 9.5% or anywhere closer to that post tax. Also, the money received from EPF is tax free after five years. Hence, in the long run EPF is the best option to invest your money. Thus, make sure you invest part of your salary in EPF account. A lot of employees take their entire salary and prefer not to invest in EPF accounts. Also, many employees withdraw their EPF money after they get a new job or just leave their account inactive.

Be Happy but don’t be very happy

“EPF becomes the best debt instrument” is surely good news from return point of view. But, the 9.5% interest rate may not be for long-term. The 1% increase in the EPF has happened because the EPFO has Rs 1,700 crore of surplus money lying in the interest suspense account. Suspense account is the account which has all the unclaimed PF money.

What about Trusts managing their own Providend Funds ?

Note that all the companies do not contribute to EPFO-managed EPF, but they manage their employees provident funds through their own trusts, Now they will have to match this 9.5% interest and it would be a tough thing to achieve . Most probably , a lot of trusts are going to appeal to the finance ministry, that this 9.5% interest rate proposal is taken back , but it looks unlikely to happen (Read more)

EPF money investment in Stock Market ?

An EPF is a long-term investment which salaried individuals have. Hence, some amount of it can be invested in long-term equity instruments. According to the finance ministry, some amount of EPF can be invested in the stock market. But, the central board of trustees (CBT) don’t agree with the same. The CBT has decided not to invest in the stock market. The labour minister Mallikarjun Kharge, who also heads CBT, says, “We had received a letter from the finance ministry asking for parking of a portion of EPFO funds in the stock market. We have received huge opposition from CBT members who oppose the idea of investing in stock markets.” As of now, the EPFO maintains a huge corpus of approximately Rs 3 lakh crore.

No Interest on Dead Accounts ?

Earlier, employees would just leave their jobs but, their EPF accounts would earn interest. However currently, that’s not the case. Now, the accounts, which are not operated for the last three years, will not earn interest. So make sure you either withdraw money from your EPF account or maintain the account. According to EPFO estimates, there are a total of 47 million accounts, of which 30 million, which means 60%/around 57% are inactive accounts. Out of the 30 million inactive accounts, around 10 million accounts (that is 33%) have less than Rs 500 balance.

The EPFO mentions that maintaining inoperative account is quite expensive. Hence, the organisation has decided to stop crediting interest in all the inactive accounts which have not received contributions in the last three years. (Read this article.)

Comments ? What do you think about this move ?

111 replies on this article “EPF interest rate increases to 9.5% for 2010-2011”

  1. B D KUKRETI says:


  2. B D KUKRETI says:


    Please reply my letter .


  3. B D KUKRETI says:


    I have worked 34 years of services with my employer wherein I was the epf member and thereafter my employer has closed the establishment in last October 2013.Now I have jloined new establishemnt but here is not epf scheme which prone within three month.I have not withdrawl my epf ,as 3 years is balance for the completing 58 years.

    Please advise me for its withdrawl or transfer to my present company. As per rule of epf intt on my epf deposit will be received upto three years.


    1. You can withdraw the EPF part. Your EPS part will give you pension later anyways !


      1. manish says:

        pl give reply soon

    2. BHOLA says:

      Sir, your reply is awaited.Kindly tell the intt giving upto three years



  4. Subhash Mittal says:

    Dear Manish,
    I am making contribution in EPF for 30000 ( say) so can I invest 150000 in mine PPF? totalling the CONTRIBUTION and INVESTMENT under PF accounts= 30000+150000=180000?. ( here i understand that under 80c 1.5 lacs wuld be eligible for income tax rebate and exceeding 30000 would be additional investement in PPF )or
    I cannot contribute and invest in both these Provident Fund Accounts more than 150000 as per Budget of FY 2014-15? or
    I can go for 180000 but i will get income tax deduction on 150000 under 80c. or
    I cannot exceed 150000 and if I did ,then the exceeding amount would come back to me or I hav to contact bank for reversal?

    1. There is no relation between PPF and EPF , they are independent ! , but the income tax combined limit is 1.5 lacs

  5. Subhradeep Biswas says:

    I have an EPF account which was opened by my previous employer. I was a contributing member for 7 years. After that I joined another organization, where
    is not a facility for EPF. My past company is no more exist. Now I would like to get withdrawn EPF A/C. My question who is now authorize to withdrawn my amount in lieu of employer of my past company.

    Please suggest the best way forward.

    1. You need to contact EPFO directly now with your EPF number

  6. Deepti says:

    Sir, I have an EPF account which was opened by my previous employer. I was a contributing member for 4.5 years. After that I joined another organization, where a new PF account was opened in my name. I was not aware regarding the transfer procedure, so I failed to transfer my existing account to this new account. Now I have 2 EPF accounts and I am currently unemployed because I got married and had to leave the job.
    My old account is about 8 years old now – out of which I contributed for 4.5 years, but have not withdrawn/transferred anything from that account. New account is only 1.5 years old.
    My query is – Is it ok to maintain 2 accounts? Will I get interest in both of them.
    I plan to start working after 1-2 years. So, I want to carry forward my old account (so that when it is 10 years old I can avail of the Pension benefits also). Please suggest the best way forward.

  7. satish kumar verma says:

    looking to the data of in operative account one should give proper thought onthis matter.actually EPFO is earning huge amount from this contribution .small sectors employees do not get justice in refund .the amount is so small that many peiople do not bother even to with draw.Also there are certain conditions of withdrawl which is not good and favorable to such employees.pension scheme is not useful for high salaried employees as the calculation of pension is disgusting .the ceiling limit of PF contribution is 6500/- then how a good pension can be expected from EPFO. I think compulsion of pension scheme should be withdrawn.s k verma Nashik

  8. Murthy says:

    I have retired on 25-6-2010. Hence, my PF Claims are settled on 27-2-2011. Please clarify whether I am eligible for this 1 percent interest increase, As PF officials have not reverted. Thanks.

    1. Murthy

      NO , you will not be eligible for this .. You have already got your PF (PPF) , then why you should get the 9.5% interest ?


  9. biswajit says:


    I am interested in Voluntary EPF. But I would like to know 3 things before investing. Can anyone answer my queries?

    1) How much interest I would receive from this FY?
    2) Can I withdraw the voluntary contribution amount to PF without swiching my present company? If yes, will I face any deduction in the interest rate?
    3)Is it required to be in the same company for 5 years to withdraw Voluntary PF? (similar to EPF)

    Thanks & Regards,

    1. Biswajit

      1. For this year you will get 9.5%
      2. VPF is nothing but same EPF , abnove the limits of 12% of basic salary . you can withdraw from it but only when you leave the present company or at the end of your working years
      3. No, you can withdraw from EPF anytime , but after 5 yrs it will be tax free , else it will be taxable


  10. Nilesh Gode says:


    I resigned from my earlier organisation and withdrew my PF in Nov 2010. I have been paid interest @ 8.5%. However, the interest rate applicable for the year 2010-11 is 9.5% as announced by the EPFO office on 15-Sep-2010. On enquiry with the HR dept, I have been informed that as the settlement has happened before the end of the financial year 2010-11, the interest has been paid @8.5%. The company is managing the PF contributions of its employees. I would like to know if the company is right in paying me interest @8.5% instead of the applicable 9.5%.

    Nilesh Gode

    1. Nilesh

      Yes , there was a lot of confusion on EPF interest and when it will be applicable . Dont think a lot on this .


    2. Murthy says:

      Nitesh, Let me know whether any updates on your EPF interest clarification/claim

  11. SKV says:


    I have recently resigned from a company where I have worked for more than 7.5 years. I am considering withdrawing my PF amount. I have following 2 question for my case

    1) Will the withdrawn amount be taxable?
    2) Is it a good idea to withdraw and then manage it?


  12. Ramesh says:

    Since the rate decided for the FY 2010-11 is 9.5%, what will be the the treatment in respect of those subscribers who had withdrawn their balances before the new rate for 2010-11 came into force? The new rate (ie 9.5%) came into force in the Q1 FY 11.

    1. Ramesh

      Those who have already withdrew their money has nothing to do with what rates are applicable later .


  13. sanjay says:


    I am working in a IT industry for 6 years and have changed jobs. I havent withdrawn any amount till date and let the money grow in this account.

    There are 2 accounts maintained by the employers. One is EPF getting 9.5 % and other is “EPS”, where Rs 541/- is deducted and saved in this EPS account.

    I want to know more about this if you can throw some light. Also my company is not giving any statement on the amount accumulated in EPS as they they say the organization where the amount is stored does not give statements.

    Please advise in case if i retire today will i get the EPF money which i know the balance and the EPS (which i dont have any track) ?


    1. Sanjay

      EPF has two parts and EPS is one of its part .. that is for for pension … For more detailes and balance you need to search more on EPF site .


  14. Akansha says:

    I want to know that is PF and pension transfer ( a small amount contributed by employer from PF amt) done by the same entity.

    or they are two different?

    1. Akansha

      Yes .. PF and pension is same .. You can transfer it to new employer when you change company

  15. Deepak Maheshwari says:

    Hi Manish

    Request your expert comments on VPF

    I understand we can invest up to 100% of Basic + DA as VPF, My question is if entire amount invested in VPF will be tax free or only 1 lakh ( 80C) . Suppose my basic is 25K and I choose to contribute entire 25K per month to VPF then does it mean my taxable income decrease by 3 lakhs ? ( Knowing 30% tax rate , isn’t it great saving itself ??) . My whole confusion is due to mixing Provident Fund contribution with 80C where only 1 lakh can become non-taxable


    1. Deepak

      It would only be limited to 1 lac


  16. Kerman says:

    Any idea whether the interest earned on EPF is compounded monthly or annually? Or is it at the discretion of the EPF fund manager?

    1. singh says:

      It is Simple Interest on Monthly Contributions. Then all the monthly interests plus interest on the opening balance is added. This becomes your interest for the whole year. Now this interest and your contribution for that year is added to your opening balance. Next year this summation becomes your opening balance. Therefore simple interest on monthly contributions & then yearly compounding. Hope I have been clear.


    More the suspense accounts……….more the epf rate!!! 🙂

    1. Atul Gosain says:

      Yes. Unless your account is also declared under suspense account 😉

  18. S Jana says:

    Our company has not added the 9.5 % rate of interest till date, when I checked with them said they are still waiting from the government to give a green signal for a go. Please let me know whether 9.5 % rate of interest for EPF has been already confirmed and from which date.

    1. S Jana

      There is huge confusion on this already., I am not sure of the status at the moment


  19. S K PATHAK says:

    This is new step. EPF amount would fetch interest on the entire money or particularly for this year (say 2010-11) only.

  20. ArtiArti says:

    Manish, 9.5% is applicable from year 10-11 or from current financial year 11-12.I am confused about the years

    1. 10-11 is the answer , we will get it this year

  21. ArtiArti says:

    Manish, 9.5% is applicable from year 10-11 or from current financial year 11-12.

  22. Arti says:

    9.5% rate applicable on VPF as well ??

      1. Arti says:

        That’s great 🙂 , Investing 24% of basic in VPF will have huge impact.

  23. Ganesh K says:

    The PPF was started for non salaried people. And they too are affected by inflation. When EPF interst was raised from 8% to 8.5% years ago PPF still remained at 8%. Now EPF interest is raised to 9.5 but PPF still gets 8%. This is great injustice and needs correction immediately

    1. Ganesh

      Yes I agree .. PPF has been at 8% from long and even 70k limit has been there from long time , this shuld be rectified .

  24. kavita k says:

    hi manish,

    can u plz tell me, that if a person has got 12 lakhs in his epf a/c till date, and if he contributes Rs. 27000/- monthly in his a/c. what will be the compounded amount if he has to contribute it for the next 8 years.

    can i have some formula for the same. plz tell.

    1. Kavita

      12 lacs will earn same 8.5% for 12 more years .. which means 1200000 * (1.085) ^ 8

      And 27000 monthly investment for 8 yrs , you can calculate it using this calculator http://jagoinvestor.dev.diginnovators.site/calculators/html/SIP-Calculator.html

  25. Giridhar says:

    Thanks for the reply, Manish. No interest payment looks to be contradicting recent changes in EPF rules – no withdrawl when changing company Further, how is that not paying interest going to resolve the problem of dormant accounts with smaller amounts? EPF still have to maintain them. It seems to be half thought policy change, what do you say?
    Anyway, no interest is applicable from April2011, so I can hold on it for another 6 months.

    1. Giridhar

      I am not sure what you mean ? To restate accounts which are just lying (because of people shifting to new jobs and leaving old accounts) will not get any interest if its inactive from 3 yrs.

      Why do you feel its half baked ?


      1. Giridhar says:

        Manish, All they are doing is not paying the interest, but they still have to maintain the account whether its Rs 100 or one crore. You know why people dont transfer their EPF accounts when changing the company – its non-transperent, dont know the procedure, no clarity on how long it will take. By forcing people to close the accounts, its defeating the very purpose of the PF. Why I say its half baked is, rather than attacking the route cause they are allowing it turn into disease.
        As somebody in this thread suggested, the first step is to centralise it. or they can put some nominal fee on non-operating accounts that inturn will close low balance accounts over the time.

        1. Giridhar

          hmm .. yes the centralization of EPF is something very much required. . I dont know what stops them to centralize them in this era .


          1. Jayaprakash Kanreddy says:

            Bad news guys, Finance Ministry rejects 9.5% interest on PF pay out for FY11.

            here is the news source. Can anybody confirm this news from any sources?


            1. err.. Thats a news , rahter not very exciting for all who have put extra money in epf due to the 9.5% interest news .


            2. Jayaprakash Kanreddy says:

              Finally its a relief as Finance ministry acknowledged that unclaimed amount is there and 9.5% can be given for this financial year 2010-11.

            3. Jayaprakash

              Thats great 🙂 . Thanks for the update


          2. Jayaprakash Kanreddy says:

            I think by march 2012, all EPF offices are going to be centralized and we can access our accounts online too. I got this news some time back. Google gives so many results for this search. Here are some…


            1. Great

              It should happen for sure .. we all need it badly 🙂


  26. JAY says:

    Dear Sir,
    I want to know, how it is possible to know my current balance in my EPF A/c, as I do have my organisation A/c no. along with my A/c no. Pls. help if there is any link for the same.
    thanks n rgds


    1. Jay

      Its not a clean procedure . Your employer should be providing you a EPF statement each year .


      1. jay says:

        As a matter of fact I do not receive the EPF statement every year. that is the reason of asking for your help to observe my current balance.


        1. Jay

          ok i am not aware of it . You should ask your employer the reason for not providing the statement every year


  27. Adarsh Shetty says:

    Hi there,
    I would like to congratulate Manish in creating this awareness.
    Awesome Vision.
    I would like to know about the Employees Pension Scheme wrt EPF as there was an article in TOI – 25 sep ’10 with the title “Babus denying you decent pension.”
    Looking forward to it.

    1. Adarsh

      Thanks for your encouragement .

      You can read this and it will clear your doubts : http://www.expressindia.com/news/fullstory.php?newsid=85763

      1. KRANTIVIR RAJPUT says:

        very Informative one……..thank you.

  28. Rakesh says:


    Thanks for the post, very informative. It’s a good decision by the EPF body, hopefully the PPF body also increases the interest rates soon. There is lot of surplus lying there too.


    1. Rakesh

      Actually I read somewhere that there are chances of it getting increased too .


  29. Jayesh Divate says:

    Hi Manish,

    Thanks for the information. Just want to know, can we increase the employee contribution to EPF.


    1. Yes, chech others comments on this article . you will get your infomation

  30. Giridhar says:

    Hi Manish, Thanks for, once again, a very good article. I was working in a public sector company. I left it in 2005 and moved abroad. Since then my EPF account is inactive. In the last paragraph, you mentioned that either withdraw or maintain the account. I would not like to withdraw it for the benefits you mentioned in the article. As I am no longer working in an Indian company, is there any way to maintain it. Please advice.

    1. Giridhar

      to maintain it you have to be in an Indian company 🙂 . You should withdraw it now , which in itself is a big task 🙂


      1. Veng says:

        My PF was stuck in Delhi PF office for more than 7 years. Any letter or phone contacts did not work in getting the money out.

        Finally, I went to the office, met PRO (public relations officer) and went up to the clerk to verify my account details. The clerk guided me properly, I got the withdrawl form, got the same attested by the previous employer and submitted the form in one go.

        Surprise, surprise, the money due got NEFT credited in to the account mentioned in 45 days. I was relieved that money came in and did not find enthsiastic enough to check what interest was credited and what not…

        On one side, it is sad that any amount of letter / fax / call did not help, on the other side, the withdrawl process happened so fast, that I could not believe my self. There are some positives still….

        1. Veng

          thats great to hear .I am sure any work which we do in person would be faster especially in these govt related tasks. I will mail you seperately .


  31. Atul Gosain says:

    EPF is tax free at any time, not just after 5 years. I got this information from rtiindia.org.

    1. If thats that case , then its some really awesome news and learning for everyone , I will do a post on this in future .

      thanks for the link


  32. dolly says:

    Hi Manish, the second para of the article mentions that “in the long run EPF is the best option to invest your money.”
    However, the third para states that 9.5% interest rate may not be for long term.
    So how can EPF be the best product in the long run when there is no guarantee that 9.5% interest rate will remain for long run.

    1. Dolly

      Yes , I had said that only assuming that 9.5% continues, however if it does not continue , still 8.5% if the best return you can make on any debt product . So the argument still holds .


  33. Arudra Kumar says:


    One can know their EPF claim status by visiting the link below:



  34. Raghu says:

    is EPF increased FOR 2010-11 or is EPF increased FROM 2010-11. My understanding was, it was only for 1 year and not from 2010-11 to ? can you please confirm if it is only for this year or ?

    1. Raghu

      It is for this year , what it means if that at the end of the year when EPFO gives interest it will be on the current year investment . This is my understanding , when i read it is from 2010-2011 .


  35. Ajay says:

    Here’s something I found on the net… To know the pesion that one is eligible for (ofcourse there may be strings attached)


    1. Thanks for the link 🙂

  36. Balbir says:

    Hi Manish,

    I wanted to know if someone leaves/retire a company and do not withdraw his EPF money for the another 5-6 years then the money kept would be growing at the standard rate of 8.5% in the idle time?

    If EPF accumulated balance is 1 Lakh after retire, and person withdraw money after 5 years then EPF money would be growing at the rate of 8.5% per annum?

    Thank you,

    1. Balbir says:

      Hi Manish, Please let me know you missed my question 🙂

      I wanted to know If EPF accumulated balance is 1 Lakh after retire, and person withdraw money after 5 years then EPF money would be growing at the rate of 8.5% per annum?

      Thank you,

      1. Balbir

        How will it grow if you withdraw it ?


        1. Balbir says:

          Hi Manish,

          I put my question in wrong way, let me elaborate 🙂

          Ajay worked in a company from 2001 to 2005, and during this time he participated on EPF, by the end of the 2005 he paid 1Lakh and his employer also paid 1Lakh in the EPF. after 2005 Ajay stopped working for his employer and started his own business. His total accumulative amount in EPF was 2Lakh by the end of the 2005.

          Now in 2010 Ajay withdraw the money from the EPF department. since Ajay didn’t contribute in his EPF A/C from 2006 to 2010. So his left 2Lakh would be keep getting 8.5% annual compounded interest from 2005 to 2010?

          Thank you,

          1. Balbir

            Yes , you would be getting the interest @8.5% till date . But dont leave it now . as from 2011 onwards it would not get interest as its now considered as inoperative account


  37. Jagbir says:

    Well, the big irony is that Govt. (EPFO) is managing money for private companies while private companies (via NPS) are managing money for Govt. Employees. Honestly, EPFO is a big headache, you even can’t check your a/c balance without much hurdles. Why there’s no way to gradually out from EPF and move in NPS which is far superior option for retirement? Equity market has demonstrated in past that it’s one of best compounder of money in long term then its beyond logic why can’t EPFO allocate at least smaller portion of its mammoth corpus towards equities. The increment for 1% rate for a year is just gimmick and shows how skeptic their practices that they just found some hidden(suspense) assets and who knows how much more malpractices are going on under the carpet? moreover, instead of improving their efficiency, they are proposing no interest for non-operative a/c. If money is still with them, they must give interest whether I’m depositing more amount in it or not, isn’t that make more sense?

    – Jagbir

    1. haha

      Good catch 🙂 . yea not sure why things are messed up beyond imagination


  38. Ankur says:


    enlighten me over below questions:
    1. what is the maximum amount that one can invest in PF via VPF?
    2. And how much is exempted from income tax? is it only 1 lacs?
    3. If one is already contributing 1 lacs in PF then there is no point in investing more (as VPF) as the contribution will be taxed @30%….am I correct?


  39. Kiran says:

    Not crediting interest to the inactive accounts is going to be shocking for many
    First of all we don’t have any transparency and ease in transferring the old account money to new account ( I have my past two employers PF stuck even though i have given the transfer forms on the first day of joining in both the companies). On top of that now those account will not earn interest means I have to run pillar to post to get it closed or retry for transfer again!! (Old employers don’t cooperate).. Well its not my mistake but still I am stuck ..

    1. Kiran

      yea , thats a sad part of the story . what are the things or measures govt could have taken to make this smoother ?


      1. Kiran says:

        I feel the following steps should ideally be taken
        Why do we have to live with so many PF accounts with state code/ Employer code etc.. Why cant we have a single account (Just like PAN number) wherever you work in india go with the same number and give it to your employer to contribute it to.

        If the above set up is not feasible why don’t we have some transparency? Are we in stone age? Why not an online account to see the PF details and seemless transfer from one company account to another..
        When I am alive and kicking at this age I cant tranfer my PF account easily, forget about what would happen If I am no more and my nominee has to get my lifetime savings money…

        Some how I have lost trust in this and even though i knew that withdrawing PF is a foolish thing (with previous 8.5% and now 9.5% and the compounding effect) this time when I joined fourth company I withdrew all my third company money from PF (Thank god atleast withdrawal went smooth and I got my money within 6 months)
        My previous two company EPF money still stuck..
        Hope some one is listening!!!

  40. jagan says:

    Hey Manish, one basic qs., is that compound interest applicable for EPF also like PPF ? or its just 9.5 ?

    Thanks , Jagan

  41. Nitin says:

    Hello Manish,

    I worked for and Indian company from 2002 – 2005 and then came to USA for project for the same company but their US subsidary from 2005 until date. Please correct me If I am wrong.

    1) I dont think I can withdraw my PF as technically I am still working for the same company.
    2) I am sure interest are paid on my a/c.

    Is there any smart thing to do when I visit India in dec for vacation ? Please let me know my options I am sure many would be in same situation who are working overseas.

    1. Nitin

      1) If you are in the same company , then you must be getting EPF in the same account , so you cant withdraw from it .

      2) Yes

      Not sure why you want to do that “smart thing” ? You are working in the same company , so why you want to withdraw , let it run the way it is , what is the problem ?


      1. Nipi says:

        Thanks for your response Manish. May be I was not very clear in my explaination.

        I am no longer paid in India, I am an employee of their US subsidary so there is no PF paid to me from 2005 onwards the time I came here in US.

        So asking about the “smart thing” is because of the reason so that I dont lose on anything when I return back in India.

  42. Shatrughan says:

    As per my knowledge company put 12% of your basic salary in your EPF account. I want to know can we increase this amount so that we can get better interest rates as well as good amount for 80C deduction.


    1. Kiran Srirama says:

      Yes. It would be called as VPF (Voluntary PF)
      From : http://www.epfindia.com/faq.htm
      24) What is the voluntary rate of Provident Fund contribution by the member?

      As per the Act, the member has to contribute at the rate of 10% or 12% of his basic pay, D.A. & retaining allowance if any. In case the member wants to contribute more than this, voluntarily he can do so at any rate he desires. i.e. upto 100% of basic and D.A. But the employer is not bound to contribute at the enhanced rate.

  43. aditya modi says:


    For any organised sector employee say IT, what are the implications?

    Also would be good if you can enhance this article with numbers pertaining to growth VIs a vis other modes of investment . The idea is to establish EPF as a worthy retirement investment tool.

    1. Aditya

      Not sure what exactly you are looking for , 9.5% is a good interest rate and everyone should have some part of his investments in EPF , but that does not replace equity investment , for any one who is in the first half of his working life , equity should be the core of his investments for long term .


  44. Kiran Srirama says:

    There are media sources mentioning that EPFO currently parks upto 5% of the funds in stocks and the current discussion is about increasing it to 15%

    Here are the related links
    –> http://mangalorean.com/news.php?newstype=local&newsid=198354
    –> Today’s Eenadu telugu paper
    –> http://www.expressindia.com/latest-news/Finmin-wants-EPFO-to-invest-35-funds-in-stocks/503139/

    1. Kiran

      Thanks for the links . Its good to know that atleast 5% is getting invested in equity , Given that its going to be invested for long term , its a very right move and should increase to atleast 15-20% as suggested .


  45. Hi Manish,
    The rate has been revised from 8.5% to 9.5% for 2010-11. But there is no guarantee that the same 9.5% will be retained for subsequent years also. It will be very difficult for the EPFO to maintain this rate going forward. I am doubtful if they can afford to offer this rate year after year untill unless the rates on Government Securities (which is the main instrument in which EPFO invests) go to 9.5% or above which is not the case as of now. So that remains to be seen.
    Best Regards
    Gopal Gidwani

    1. Gopal

      Agreed , I have mentioned in the article that investors should rejoice little on this as its because of suspense account that the interest has gone up


  46. Marshal says:

    very useful information, thanks for sharing.
    #1. How about companies that maintains there own PF account, will they give 9.5%?
    #2. Will it be wise to increase employee contribution in EPF for next year to enjoy 9.5%? rather than putting into PPF?

    Once again manish thanks for post

    1. Kiran Srirama says:

      Government has mandated that the EPF amount should be deposited with EPFO to avail the tax benefit (in 2006 budget), hence companies who were managing it on their own have stopped doing it.

      Yes. You also need to understand that withdrawing from PF is not the same as PPF account.

      1. Marshal says:

        thanks @kiran, and @manish for replying
        #1. but my employer is still managing its own trust :).. well its clear from link in manish’s comment that pvt co. are cribbing about same..!!..so am hoping that pvt co. should match govt rate…and then eventually i will be able to take call on #2.. i.e. to invest more in EPF then PPF..

        #2. What is the difference between withdrawing from PPF and EPF?


        1. Kiran Srirama says:

          PF and PPF accounts have different terms and conditions for withdrawing.
          PF :
          You can only withdraw from PF
          1. At retirement (i.e. when you stop working, some folks withdraw when they change jobs.. thats different case though)
          2. Some major incidents in your life – Kids’ marriage, repaying home loan, etc… See the complete list here – http://www.epfindia.com/epf.htm

          Partial withdrawal upto 50% of the deposited amount is permitted after 5 years.
          See the other details here –

          1. marshal says:

            thanks kiran for information, really appreciate it

    2. Marshal

      1) Yes , they have to match the interest equal to EPFO interest , I have updated this info in the article , Read this : http://timesofindia.indiatimes.com/business/india-business/95-on-PF-Pvt-trusts-cry-foul/articleshow/6576029.cms

      2) Yes


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