Govt slashes interest on GPF to 7.9% after decline in overall rates in financial system

The government cut the interest rate on General Provident Fund (GPF) and other similar funds following the decline in the overall interest rates in the financial system. For the July-September quarter, GPF and other similar funds will pay 7.9 percent interest rate to its subscribers, as compared to 8 percent during the previous quarter, Department of Economic Affiars in Finance Ministry said on 12 July.  The rate is in line with that of Public Provident Fund (PPF). “It is announced for general information that during the year 2019-2020, accumulations at the credit of subscribers to the General Provident Fund and other similar funds shall carry interest at the rate of 7.9% (Seven point nine percent) w.e.f. 1st July, 2019 to 30th September, 2019. This rate will be in force w.e.f.1st July, 2019,” the ministry of finance said in a notification. This interest rate will be applicable on provident funds of Central government employees, railways and defence forces. the government said. [caption id=“attachment_6221211” align=“alignleft” width=“380”] Representational image. Reuters.[/caption] In April this year, the government had retained the interest rate for GPF and other related schemes at 8 percent for the April-June quarter, according to a PTI report. The interest rate on GPF was at 8 percent in the January-March quarter of 2018-19. “It is announced for general information that during the year 2019-20, accumulations at the credit of subscribers to the GPF and other similar funds shall carry interest at the rate of 8 percent with effect from 1 April to 30 June 2019,” a Department of Economic Affairs notification had said. The interest rate will be applicable on provident funds of central government employees, railways and defence forces. Last month, the government also retained interest rates on small savings, including National Savings Certificate (NSC) and PPF for the first quarter of current fiscal. In October last year, the government had increased the rate of interest for GPF and other related schemes by 0.4 percentage points to 8 percent for the October-December quarter, reported PTI. The interest rate on GPF was 7.6 percent for the July-September quarter of 2018-19. — With PTI inputs