New Delhi: At the time when Finance Ministry is looking to cut interest rates on small savings instruments,the Finance and Investment Panel of the Employees’ Provident Fund Organisation (EPFO) board has recommended an 8.95 per cent rate of return on statutory savings of over 5 crore for 2015-16.
According to reports, the proposed rate is the highest in five years.
At present, EPFO gives 8.75 per cent as the rate of return.
An 8.95% rate will translate into returns of nearly 12% for those in the highest slab as the withdrawals and interest earnings do not attract tax at the time of withdrawal.
This would make investment in EPFO more attractive than most savings alternatives such as General Provident Fund, Public Provident Fund, Special Deposit Scheme and National Savings Certificates which offer lower rate of return.