Govt Ratifies 8.25% Interest Rate on EPF for FY25
The Central government has officially approved the Employees’ Provident Fund Organisation’s (EPFO) proposal to maintain the interest rate on provident fund (PF) deposits at 8.25% for the financial year 2024–25. The move will benefit nearly 70 million salaried Indians.
The EPFO’s central board of trustees had recommended retaining the 8.25% interest rate during its meeting on February 28, amid global financial uncertainties. The proposal was subsequently sent to the finance ministry for ratification, which has now been granted.
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“The finance ministry has given its concurrence to the 8.25% PF interest. The labour ministry has sent a communication to the EPFO in this regard,” a government official said.
Following the approval, interest earnings for FY25 will be credited to the accounts of EPF subscribers in the coming weeks.
The interest rate remains unchanged from the previous fiscal year but is still lower than historical rates such as 8.8% in 2015–16, reflecting the evolving investment landscape and returns on the EPFO’s portfolio.
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The EPF serves as a retirement savings and social security net for millions of Indian workers. Both employer and employee are legally required to contribute 12% of the employee’s basic salary to the fund, which is managed by the EPFO.
The EPFO invests a portion of its corpus in stock markets and exchange-traded funds (ETFs). In a move aimed at improving returns, the EPFO board, during its 236th meeting in November 2023, approved reinvesting 50% of redemption proceeds from ETFs back into equities.
Disclaimer: This post is for general informational purposes only. It does not constitute financial advice. Please consult a qualified professional before making financial decisions.
