National, Back Page

GPF, CPF profit rate for govt employees re-fixed

Published : 23 Oct 2021 10:31 PM | Updated : 24 Oct 2021 01:11 PM

The government has refixed the profit rate of the General Provident Fund (GPF) and Contributory Provident Fund (CPF) of government employees.

From now on, the government employees in contributions to the GPF and the CPF will get interest at the rate of 11 to 13 percent at three levels, which was at 13 percent for so long.

The Finance Department of the Finance Ministry on Thursday issued a notification setting new interest rates for GPF-CPF.

In accordance with the provisions of Rule 12 (1) of the General Provident Fund  

Rules, 1979 and Rule 12 of the Contributory Provident Fund Rules, 1979, the profit margins of GPF and CPF for the financial year 2021-22 have slightly reduced. However, even after the reduction in interest rates, government employees will get higher interest rates than in the banking sector or savings certificates.

According to the new guidelines, in the 2021-22 financial year, the initial rate of GPF will be up to Tk 15 lakh and the profit rate will be 13 percent. The profit rate from Tk 15 lakh to Tk 30 lakh has fixed at 12 percent. If the initial GPF is more than Tk 30 lakh, the profit rate will be 11 percent. The rate of return on investment up to Tk 15 lakh has not changed.

However, not all CPF-affiliated entities (autonomous bodies, corporations) have the same financial consistency, so that institutions and organizations can deposit the CPF rate as per the maximum rate of their own financial regulations and financial capabilities, as per the directive states.

The government gives money along with profit, if employees keep in this fund, GPF interest continues to grow at a compounding rate. After retirement, employees can get a good amount of return at the end of the job.

On the other hand, if the employees keep money in CPF, the government gives them the same amount of money. Whereas employees do not make any profit on excess deposits. Because any worker who gets a salary from the revenue sector can keep money in GPF, alongside those who get salary from outside the revenue sector keep their money in CPF.

At present, the interest rate of Fixed Deposit Receipt (FDR) in the bank is 6-7 percent. One of the most reliable places for middle class people to buy savings certificates is to get 9 to 11 percent interest. However, according to the new rules of the government, investing up to Tk 15 lakh in a five-year Bangladesh Savings Certificate will yield a profit of 11.28 per cent at the end of the term. Interest on higher investment will be available at 10.30 percent. If the investment is more than 30 lakh, the profit rate will be 9 percent.

At the end of the five-year term, the pensioner's savings certificate will earn a profit of 11.76 percent. With an investment of more than 15 lakh, the profit rate will be 10.75 percent. With an investment of more than Tk 30 lakh, the rate will be 9.75 percent, according to the National Savings Department (NSD).

Currently, the new rates are applicable for the procurement of savings certificates afresh while the existing owners will continue receiving previous rates until the maturity of their instruments, said sources of NSD.

At present, by issuing a notification in December 2015, the finance department did not reduce the interest rate and set a limit of 25 percent of the basic salary. However, the government employees could keep up to 60 percent of their basic salary in GPF before using the directive.

In addition, employees of some government banks and autonomous agencies deposit money in the CPF but the interest rate of CPF is relatively low.

Related Topics