New Delhi: In a move which will hurt millions of employees, the government has reduced interest rate on contributions to General Provident Fund (GPF) and other similar funds to 8% from October 1 to December 31 for fiscal 2016-17.
The interest rate on such funds was 8.1% from April, 2016, while it was at 8.7 per cent for the previous fiscal.
“It is announced … that during the year 2016-2017, accumulations at the credit of subscribers to the General Provident Fund and other similar funds shall carry interest at the rate of 8.0% (Eight per cent) w.e.f. 1st October, 2016 to 31st December, 2016,” the Finance Ministry Resolution said today.
The reduction of increased interest rate will be available to subscribers of Contributory Provident Fund (India), All India Services Provident Fund, State Railway Provident Fund and General Provident Fund (Defence Services).
Contributors to Indian Ordnance Department Provident Fund, Indian Ordnance Factories Workmen’s Provident Fund, Indian Naval Dockyard Workmen’s Provident Fund, Defence Services Officers Provident Fund and Armed Forces Personnel Provident Fund will also hurt from the move.
Rate of interest on GPF is generally fixed after taking into consideration the average secondary market yields on government securities of similar maturity.