MOF Notifies 7.1% Interest Rate for Special Deposit Scheme in July-September Quarter
The Finance Ministry said today that the interest rate for deposits placed under the Special Deposit Scheme (SDS) for non-government provident, superannuation and gratuity funds would be at 7.1% for the July to September quarter. The interest rate remains the same as in the April to June quarter and was effective from July 1, 2024.
Interest rate on SDS constitutes an important determinant of the rate of interest declared for the EPF. The corpus of most of the EPF is invested in this scheme as the majority portion constitutes around 80%. SDS, was a product of the Government of India, which came up in 1975, in order to ensure sound, safe investments in provident funds for employers both in public and private sectors.
The deposits under the Social Security Scheme for non-government provident funds, which are currently earning an interest rate of 7.1% per cent, will continue to earn interest till September 30, 2024, based on a notification issued by the Department of Economic Affairs. The EPFO, where most of such provident funds save their funds, has had such contributions as a large investment avenue.
The SDS was started with a view to opening up safe investment avenues when the Indian economy was worried about financial concerns. It was envisaged to provide the confidence of investors in safe options for provident fund accumulations, which are vital aspects of the security of employees’ finances. “.
The principal reasons for investment in the SDS have been its assured rate of return. In this aspect, it has been particularly popular among provident fund trusts as safe investments and secured predictable returns. The Government of India secures the invested principal offering high security. Regular revision of interest rates through periodic review keeps it competitive with existing economic conditions.
The retention of the 7.1% interest rate for the current quarter ensures a stable return to non-government provident funds, thus further strengthening employees’ financial futures all over the country.
