According to the Notice of the People's Bank of China, the Ministry of Housing and Urban-Rural Development and the Ministry of Finance on Perfecting the Formation Mechanism of Deposit Interest Rate of Employee Housing Provident Fund Account, the deposit interest rate of employee housing provident fund account is implemented according to the benchmark interest rate of one-year time deposit listed on the interest settlement date, and the actual interest settlement rate is 1.5%. Take the newly opened employees in June 2023 as an example. Even if the actual deposit time is only one month in 2023, the interest will be settled at the one-year deposit rate.

Housing provident fund is a personal housing savings fund specially used by employees for housing consumption expenditure, which has two characteristics:

First, it is cumulative, that is, the housing provident fund is not an integral part of employees' wages, and it is not paid in cash. It must be deposited in a special account opened by the housing provident fund management center in the entrusted bank, and special account management is implemented.

The second is special. The housing provident fund is earmarked for special purposes and can only be used for the purchase, construction, overhaul of self-occupied housing or the payment of rent during storage. Only when employees leave, retire, die, completely lose their ability to work, terminate their labor relations with their units or move out of their original cities can they withdraw housing provident fund from their accounts.

Characteristics of provident fund

Universality: urban workers, regardless of the nature of their work units, family income and whether they have housing, must pay the housing provident fund in accordance with the provisions of the Regulations;

Compulsory (policy): If the unit fails to register the deposit of housing provident fund or set up a housing provident fund account for employees, the housing provident fund management center has the right to order it to do so within a time limit. If no correction is made within the time limit, it may be punished according to the relevant provisions of the Regulations, and may apply to the people's court for compulsory execution;

Welfare: in addition to the housing provident fund paid by employees, the unit has to pay a certain amount for employees, and the interest rate of housing provident fund loans is lower than that of commercial loans;

Repayment: When the employee retires, resigns, or completely loses the ability to work and terminates the labor relationship with the unit, or the registered permanent residence moves out and settles abroad, the paid housing accumulation fund will be returned to the individual employee.

Reference to the above contents: Notice on Perfecting the Formation Mechanism of Deposit Interest Rate in Employee Housing Provident Fund Account issued by the Chinese Government Network-Three Departments.