EPF Interest Rate Unchanged at 8.25% for FY25: No Hike for 7 Crore Employees

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EPF Intrest rate

Key Points

  • EPF interest rate for FY 2024-25 remains unchanged at 8.25%, benefiting over 7 crore salaried employees.
  • No increase in the rate, dashing hopes of higher returns for account holders.
  • This is the second consecutive year with an 8.25% rate, following a marginal hike from 8.15% in 2022-23.
  • EPF continues to offer higher, stable, and tax-efficient returns compared to most fixed-income options.
  • The decision was finalized at the 237th meeting of the EPFO’s Central Board of Trustees and ratified by the Finance Ministry.

New Delhi: The Central Government has officially ratified the Employees’ Provident Fund (EPF) interest rate at 8.25% for the financial year 2024-25, bringing disappointment to over 7 crore salaried employees who were hoping for an increase in their retirement savings returns. The notification, issued after approval from the Ministry of Finance, confirms that the interest rate will remain unchanged from last year’s level.

Decision Finalized After February Meeting

The decision to retain the 8.25% rate was made during the 237th meeting of the Central Board of Trustees (CBT) of the Employees’ Provident Fund Organisation (EPFO), chaired by Union Labour Minister Mansukh Mandaviya in February 2024. The rate was then sent to the Finance Ministry for concurrence, which has now been granted, paving the way for the interest to be credited to members’ accounts.

No Rate Hike: Impact on Employees

This marks the second consecutive year that EPF deposits will earn 8.25%, following a marginal hike from 8.15% in 2022-23. The rate had been 8.1% in 2021-22, the lowest in over four decades, and 8.5% in 2020-21. The lack of an increase this year means employees will not see higher lump-sum returns on their savings, raising concerns about long-term financial planning amid inflation and rising costs.

EPF Remains a Competitive, Tax-Efficient Option

Despite the disappointment, EPF continues to offer one of the highest and most stable returns among fixed-income investment options, outpacing most bank deposits and government savings schemes. The interest earned on EPF deposits remains tax-free up to a specified limit, making it a favored tool for retirement planning in India.

Interest Rate History (Recent Years)

Financial YearEPF Interest Rate
2020-218.50%
2021-228.10%
2022-238.15%
2023-248.25%
2024-258.25%

How the Rate Is Set

The EPF interest rate is proposed annually by the EPFO’s Central Board of Trustees, which includes representatives from employees, employers, state governments, and the Ministry of Labour. The proposal requires final approval from the Ministry of Finance before being notified and credited to members’ accounts, typically in the latter half of the financial year.

What Should Employees Do?

  • Check EPF Balance: Employees can check their updated EPF balance via the UMANG app, EPFO portal, or by giving a missed call from their registered mobile number.
  • Plan for the Future: With EPF rates stable but not increasing, financial experts recommend diversifying savings and considering other investment options for higher long-term growth.
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