The Employees’ Provident Fund Organisation (EPFO) on Monday approved an interest rate of 8.25% on EPF deposits for 2025-26, retaining the same rate for the second consecutive year, according to an official statement.
The annual EPF interest rate takes effect after approval by the Central Board of Trustees (CBT) and ratification by the Finance Ministry. With CBT recommending 8.25%, the ministry will officially notify the interest rate, following which EPFO will credit the rate of interest to subscribers’ accounts.
EPF is a government-backed retirement savings scheme in India designed for salaried employees, managed by the EPFO under the Ministry of Labour and Employment.
Here’s how your contributions are invested —
With contributions from both employers and employees, these funds are invested in a combination of debt and equity instruments to produce returns.
EPFO funds invested in debt instruments are managed by portfolio managers appointed by the CBT. The portfolio managers are required to invest funds according to the investment pattern notified by the Ministry of Labour & Employment and the guidelines issued by the Central Board periodically.
Meanwhile, the investment pattern notified by the Ministry of Labour & Employment requires equity and related investments to be between 5% and 15%.
The funds of EPFO, which are invested in equity instruments, are managed by Asset Management Companies (AMCs) appointed by the Central Board of Trustees for ETF investments. EPFO invests these funds in Equity instruments through ETFs based on the BSE Sensex Index or NSE Nifty 50 Index.
Category-wise break-up of investments:
Nearly 17.04% of EPF funds are invested in central government securities, 46.01% in state development loans, 0.87% in state-guaranteed securities, 3.54% in special deposit scheme, 17.52% in corporate bonds (PSUs/PSFIs), 5. 02% in corporate bonds (private sector), 9.52% in ETFs and 0.49% in Tri-Party Repo (TREPS) and Liquidity Management Funds (LMF), according to the EPFO annual report for FY24.
At its latest meeting, the CBT approved the Annual Report of EPFO for 2024-25 and recommended it for tabling before Parliament.
In addition to the EPF interest rate and annual report, CBT also gave nod for —
- A one-time Amnesty Scheme to address compliance issues arising from income tax–recognised trusts that are yet to be covered or granted exemption under the EPF & MP Act, 1952.
- A new simplified SOP on EPF Exemption, consolidating the existing four SOPs and the exemption manual into a single comprehensive framework, which aims to reduce compliance burden.
- CBT has approved the notification of new social security schemes under the Code on Social Security, 2020.
- The Revised Estimates for the year 2025-26 and Budget Estimates for the year 2026-27 for EPFO and Schemes administered by EPFO.
- The Board approved a comprehensive SOP to establish a transparent and time-bound framework, ensuring structured decision-making and enhanced oversight by the Investment Monitoring Cell (IMC).
