EPF & VPF (Employee / Voluntary Provident Fund) Interest Rates

As many of you might be aware about the EPF  (Employee Provident Fund)  & VPF (Voluntary Provident Fund) Interest rates are decided by  Employees’ Provident Fund Organisation (EPFO) and the government every year. For the last financial year 2010 – 11 EPF interest rate was 9.5%, a surprising bonus of 1% for all the EPF & VPF subscribers. But the news doesn’t seem good for present financial year of 2011 – 12. The interest rates on EPF have still not been decided and seems that it would be lowered. The interest rate on EPF may go down to 8.25% for FY 2011 – 12.

Interest rate trends for EPF  (Employee Provident Fund)  & VPF (Voluntary Provident Fund) over the years:

(Click on the image to enlarge it)

As you can see form the above graph:

• Interest Rate of EPF & VPF from FY 1989 – 90 to 1999 – 00 was 12%
• It was reduced by 1% for the FY 2000 – 01 to 11%
• Next Year 2001 – 02 it was further reduced to 9.5%
• Then for FY 2005 – 06 on wards it was pegged at 8.5% until last year when it was again raised to 9.5%
• Last year was historical in the sense it was first time the returns on EPF was raised!