PF Interest Rate Update: Will 8.25% Stay or Is a New Calculation Formula Coming Soon?

PF Interest Rate: Lakhs of subscribers of the Employees’ Provident Fund Organisation (EPFO) are in doubt about this year’s PF interest rate (FY2025-26). The biggest question on people’s minds is whether the government will increase the interest rate on provident fund deposits this year or keep it at 8.25% like last year.

It is expected that this year, for the third consecutive year, the interest rate on provident fund deposits will remain unchanged at 8.25%. A decision in this regard will be taken in the meeting of the Central Board of Trustees of EPFO on March 2. If approved, it will be a matter of joy for EPFO subscribers, as the stable returns of the provident fund funds are directly linked to the retirement savings of employees.

How much corpus does EPFO currently have?

In this meeting scheduled for early March, not only the interest rate but also various other issues will be discussed. Sources say that this year, reforms can be implemented to make PF transactions faster and easier for subscribers. Sources said that this fiscal, EPFO will have enough surplus from investments to sustain the current interest rate of 8.25 per cent.

However, it may be difficult to sustain such returns in future. Therefore, EPFO will have to consider new investment methods. EPFO currently manages around Rs 25-26 lakh crore. A significant portion of this money is deposited in state development loans (around 41 per cent), central government securities (16 per cent), corporate bonds (15.9 per cent) and exchange-traded funds (ETFs).

A meeting was also held on February 16

Currently, all attention is on the next meeting of the Central Board of Trustees (CBT), the highest decision-making body of EPFO. The CBT is chaired by Labour and Employment Minister Mansukh Mandav. Ahead of the March 2 meeting, the 116th meeting of the Executive Committee of the CBT was held on February 16 in New Delhi under the chairmanship of Vandana Gurnani, Secretary, Ministry of Labour and Employment. The committee reviewed the progress of schemes run by the EPFO and discussed steps to strengthen social security provision.