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The Government of India has increased the interest rate for General Provident Fund and other related schemes. In the last three months, 8% interest rate was available in these schemes, but now it has reduced interest rates to 7.9% for the second trimester of the financial year. Reducing interest rates will harm the central government, railways and defense personnel.
The General Provident Fund is a government funded PF or a future fund fund. In this fund, a portion of the salaries of government employees is deposited, which they later receive at retirement time. A notification issued by the Finance Ministry said that during the financial year 2019-20, this general instruction has been given that the interest rate for the General Provident Fund and its equivalent fund has been revised from 1 July, 2019 to 7.9 percent.
Under this fund, the PF gets deposited to the designated employees before December 31, 2003 or earlier. For other funds, interest rates, State Railway Provident Fund, General Provident Fund, Indian Ordnance Dept. Provident Fund, Indian Ordinance Factory Workmen's Provident Fund, Indian Naval Doctor Workmen's Provident Fund, Defense Services Officers Provident Fund and Amended Forces Personal Providence Fund .
Earlier, the interest rate change of the GFF was made in October 2018, while the interest rate increased by 0.4% to 8%. Last month, the government reduced the interest rate on small savings schemes, such as Public Provident Fund, National Savings Certification, to 0.1 percent.
The interest rate on the NNC and PPF was 7.9% and the interest rate on Kisan Development Paper was 7.6 percent. In March 2017, the government had simplified the regulation of GFF, after which the people linked to it could get payment within 15 days. After the completion of 10 years of employee's employment, some special requirements can be withdrawn by a JFF, before it happens only after 15 years.
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