After raising the interest rate on small savings such as the NSC and PPF by up to 0.4 percentage for the October-December quarter, the Government of India now has increased the interest rate for the General Provident Fund (GPF) and other related schemes by 0.4 percentage to 8 per cent for the October-December quarter.
The interest rate for the July-September quarter of 2018-19 stood at 7.6 per cent for the GPF.
A Department of Economic Affairs’ notification said, “… during the year 2018-2019, accumulations at the credit of subscribers to the General Provident Fund and other similar funds shall carry interest at the rate of 8 per cent with effect from October 1, 2018, to December 31, 2018.”
The interest rate would be applicable on the provident funds of central government employees, railways and defence forces.
The GPF account is available only for government employees and employees working in private companies cannot have this account.
To become a member, a government employee needs to contribute a certain percentage of their salary to the account and has to be resident of India. The accumulations in the fund are paid out to the government employee at the time of superannuation or retirement.
At the time of account opening, the account holder can provide a nominee who will receive the benefits from the account in the event of account holder’s demise.
The GPF also provides the benefit of an interest-free loan through a feature known as GPF advance. The loan should be paid back in regular monthly instalments.
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