The Decision of the State Council on Establishing a Unified Basic Old-age Insurance System for Enterprise Employees (Guo Fa [1997] No.26) stipulates that the interest on the amount stored in individual accounts shall be calculated with reference to the bank's deposit interest rate for the same period of each year. The Decision of the State Council on Improving the Basic Old-age Insurance System for Enterprise Employees (Guo Fa [2005] No.38) stipulates that individual accounts for basic old-age insurance shall be gradually implemented, and "the state shall formulate measures for the management and investment operation of individual account funds to maintain and increase the value". According to this regulation, after an individual account is established, its real interest rate should be determined according to the return on investment. In practice, if the personal account is false, the bookkeeping interest rate is generally determined with reference to factors such as the average wage growth rate of employees and the price index, which varies from place to place. If you do a personal account, it is determined according to the return on investment. Therefore, the "Social Insurance Law" stipulates that "the bookkeeping interest rate of individual accounts shall not be lower than the bank time deposit interest rate and shall be exempted from interest tax". This provision not only provides the lowest bookkeeping interest rate for the preservation and appreciation of personal accounts, but also leaves room for adjustment for the State Council to improve its policies with the development of practice. The current "interest tax" in China is the "interest, dividend and dividend income" tax item of personal income tax, which mainly refers to the personal income tax levied on the interest income obtained by individuals saving RMB and foreign currency in China. Because the personal account funds of basic old-age insurance are mainly used for providing for the aged after retirement, which is different from ordinary savings, the social insurance law stipulates that interest tax shall be exempted, which reflects the state's support for social insurance.

Further reading: How to buy insurance, which is good, and teach you how to avoid these "pits" of insurance.