The central government on Wednesday retained the interest rate for General Provident Fund (GPF) and other similar funds at 8 per cent for the April-June quarter, which is in line with that of Public Provident Fund (PPF).
The interest rate on GPF was fixed at 8 per cent during the quarter ended March, 2019.
"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 per cent with effect from April 1 to June 30, 2019," the Department of Economic Affairs said in a notification.
This interest rate, which will be applicable on provident funds of central government employees, railways and defence forces, will be in force with effect from April 1, 2019. Other funds eligible for the benefit include the Contributory Provident Fund (India), the All India Services Provident Fund, the State Railway Provident Fund, the General Provident Fund (Defence Services), the Indian Ordnance Department Provident Fund, the Indian Ordnance Factories Workmen's Provident Fund, the Indian Naval Dockyard Workmen's Provident Fund, the Defence Services Officers Provident Fund, and the Armed Forces Personnel Provident Fund.
Last month, the government had retained interest rates on small savings, including National Savings Certificate (NSC) and PPF at 8 per cent for April-June period of current fiscal.
In March 2017, the government relaxed the norms for withdrawal of General Provident Fund (GPF) which will allow subscribers to receive payments within 15 days. As per the new rule, employees can also withdraw the fund for select purposes after completing 10 years of service, as against 15 years of service earlier.
What is GPF and who can subscribe it?
GPF is provident fund account where only government employees are entitled to be a member. The government employees contribute a part of their salary and are entitled to the accumulated fund at the time of retirement.
Applicability: The general provident fund rules are applicable to those central government employees who have been appointed on or before December 31, 2003. The employees can also nominate someone at the time of opening their account.
Eligibility: Temporary government servants after continuous service of one year and permanent government servants shall subscribe to GPF compulsorily. However, temporary government servants may subscribe to GPF even before completion of one year's service.
Amount of subscription: A sum as fixed by the subscriber, subject to a minimum of 6% of emoluments and not more than his total emoluments.
Edited by Chitranjan Kumar