GPF rate stays 7.1% for April-June 2023 quarter
April 10, 2023
The Finance Ministry on April 10 notified this quarter’s interest rate on GPF savings, which is also applicable for other similar provident funds
The government has retained the interest rate payable on savings in the General Provident Fund (GPF) at 7.1% for the April to June 2023 quarter, making this the 13th quarter in a row that the rates have been static for government employees’ PF corpus.
The Finance Ministry notified this quarter’s interest rate on GPF savings, which is on par with the returns announced for the Public Provident Fund (PPF), on April 10. The GPF rate is also applicable for other similar provident funds such as the State Railway PF, Armed Forces Personnel PF, Defence Services Officers’ PF and Indian Ordnance Factories Workmen’s PF.
The rate of return on the PPF, a small savings scheme that offers tax-free returns, was last hiked in January 2019 and has remained unchanged since April 2020 when it was slashed from 7.9% to 7.1%.
The returns on small savings schemes are linked to market yields on government borrowings of similar maturities based on a formula devised by a committee under former deputy RBI governor Shyamala Gopinath, as per which the PPF rate from October 2022 should have been around 7.7%.
The government has hiked the rates on almost all small savings schemes for this quarter, barring the PPF rate as officials feel the tax-free returns of PPF translate into a higher effective yield for its investors. However, the rate on another tax-free savings scheme, the Sukanya Samriddhi Account launched to encourage savings for the girl child in 2015, was raised this quarter for the first time in four years – from from.6% to 8%.
The government has recently hiked the dearness allowance for its employees and formed a committee under Finance Secretary T.V. Somanathan to improve the National Pension System for government employees who joined service after January 1, 2004 and are not eligible for a guaranteed pension that earlier recruits get.