Key Points
The Employees Provident Fund Organisation (EPFO) declares the annual interest rate typically during the last quarter of the financial year..
Following the same tradition, in February this year the EPFO announced the new rate applicable for the deposits held during financial year 2023-24 with a marginal increase of the interest rate to 8.25%..
However, going by the previous years trends it is highly unlikely that this interest will be credited any time soon, especially before the end of financial year on March 31, 2024...
Doesn't this delay of interest credit impact the interest amount that EPF subscribers would have earned during the new financial year on EPF balances, had they got the interest credited into their EPF account right at the end of the last financial year?..
To understand why a delay of interest payment does not result in loss of interest earning for EPF subscribers, we need to understand the accounting method of calculating earned interest in the new year that EPFO follows when it credits the due interest of the past year after a delay of many months...
