Before Holi 2022, the Modi government gave a big blow to the employees working in the private sector. EPFO interest rates have been cut. According to the information given on Saturday, the latest EPF rate was reduced from 8.5% to 8.1%. This is the lowest interest rate since 1977-78. Let us tell you, in 1977-78 it was 8%.
A large number of Indians use this fund for retirement. But most people don’t know where their funds are being used. Or where EPFO invests these funds. Let us understand one by one-
Also read: Before Holi, ICICI Bank gave a big gift to customers, FD rates changed
Where is your money invested?
EPFO follows the book rule when it comes to investments. According to the rules, 85% of the money is invested in Debt and 15% is invested in the equity market.
1- Debt Investment – Whenever it comes to the selection of debt instrument, it is to be kept in mind that the organization particle should invest less than 45% and not more than 65% in government security. Apart from this, according to the requirement of 20% to 50%, investments are made in corporate institutions which include banks, public financial institutions.
2- Equity Investment: In this, investments are made in Mutual Funds and ETFs. Apart from this, direct investment can also be made in the shares of companies with a market capital of more than Rs 5000 crore. But SEBI registration is definitely checked in this investment.
Let us tell you, according to the rules of EPFO, 12%-12% of the basic salary is invested by the employee and the employer. EPFO rates have been cut in the last 5 years. Which has a direct impact on 6 crore people.