In a move that will affect crores of salaried workers, the Employees’ Provident Fund Organisation (EPFO) has decided to keep the interest rate on provident fund deposits unchanged at 8.25% for the financial year 2025-26.
The decision was taken at the 239th meeting of the Central Board of Trustees (CBT), chaired by Union Labour and Employment Minister Mansukh Mandaviya.
This means subscribers will continue to earn the same rate of return on their retirement savings as they did last year.
WHAT THE DECISION MEANS FOR SUBSCRIBERS
For over 7.8 crore contributing members, the news brings stability. The interest earned on their retirement savings will continue at 8.25%, the same as last year.
The proposal will now be sent to the Ministry of Finance for final approval. Once cleared, the interest will be credited to subscribers’ accounts for the current financial year.
The last change in the rate came in 2024, when it was raised from 8.15% to 8.25% for 2023-24. Since then, there has been no further increase or reduction.
HOW EPF INTEREST IS CALCULATED
Many workers often wonder how the interest in their EPF account is worked out. Interest is calculated every month on the running balance in the account. However, it is credited only once, at the end of the financial year.
It is also important to keep the account active. If there are no contributions for 36 months, the account becomes inactive and stops earning interest.
EPF interest rates have moved up and down over the years. In 2021-22, the rate fell to 8.10%, the lowest in four decades. That was the weakest level since 1977-78.
In 2022-23, the rate was slightly higher at 8.15%. It was then increased to 8.25% in 2023-24, where it has stayed since.
For now, EPFO’s stance is steady and cautious. Despite changing market conditions, subscribers can expect their provident fund savings to grow at 8.25% for another year, offering stability for long-term retirement planning.
