Recently, the EPFO’s board has reduced the PF interest rate from 8.5 percent to 8.1 percent. The interest rate available on PF in this financial year 2021-22 is the lowest interest rate in the last 43 years. Earlier in the financial year 1977-78, interest of 8 per cent was paid, after which it has increased continuously. The interest rates on all small savings schemes have come down in recent years.
Talking about, according to the rules of EPFO, 12-12 percent of the basic salary is contributed by the employee and the employer towards PF. PF is the retirement provident fund of any salaried person. For this EPFO invests this money very carefully so that the future of all the employed people can be kept safe. Let us know where EPFO invests all its money.
EPFO follows its rule book for investing money. Most of the money is invested by EPFO in such a way where the investment is more safe and there is no risk of drowning. On the other hand, if we talk about the rule book, 85 percent of EPFO’s money is invested in debt and the remaining 15 percent in equity through mutual fund ETFs.
Most of the money under debt funds is included in government securities like bonds etc. According to the rule book of EPFO, it has to invest at least 45% of the fund and not more than 65% in government bonds etc. The remaining 20 to 50 percent of the money is used by the EPFO for investment in other corporate entities like banks, finance institutions etc.
Under equity investment, EPFO invests its money in mutual funds and ETFs as per the requirement. Apart from this, EPFO can also invest directly in companies with a capitalization of more than 5 thousand crores.