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EPFO Interest- Rate Stays at 8.25%, Why the Government Didn’t Raise PF Returns This Year?

Sweta Mitra
By Sweta Mitra
2 min read
Published: 06 Mar 2026
EPFO Interest- Rate Stays at 8.25%, Why the Government Didn’t Raise PF Returns This Year?

EPFO Interest: The EPFO ​​has set this year’s PF interest rate. PF balances will earn 8.25 percent interest this year. But how is this interest credited to your and our PF accounts? Will we earn a flat 8.25 percent interest on the entire balance? If you withdraw money mid-term, will you lose interest? Let’s understand the answers to these questions in simple terms.

How PF Interest is NOT Calculated?

The EPFO ​​sets annual interest rates for PF. If your opening PF balance in April 2025 was Rs 1 lakh and you added Rs 5,000 to your account every month, your balance in March 2026 would be Rs 160,000. If you think that Rs 13,200 will be added to your PF balance at the end of the year at a rate of 8.25 percent, you’re mistaken.

Let’s understand this using the example above. Suppose your PF account’s opening balance in April 2025 was Rs 1 lakh. At the end of the year, i.e., March 2026, you will earn a full 8.25 percent interest on this Rs 1 lakh. The only condition for this is that you have not withdrawn any money from your account throughout the year. After this, interest will be calculated monthly on the contributions you make to your account, and that interest will be credited to your account at the end of the year. However, the contributions that come into your account throughout the year will not earn the full 8.25 percent interest; rather, the interest will be calculated monthly and credited to your account at the end of the year.

PF Monthly Interest Rate

Now, how will the monthly interest rate be determined? To do this, divide the annual interest rate, i.e., 8.25 percent, by 12. This year’s interest rate is 8.25 percent, which means interest will be added at the rate of 0.6875 percent each month. A formula is also used to calculate the monthly interest rate on your PF balance.

What Happens to interest if I Withdraw Money from PF Balance

If you withdraw money from your PF, you’ll receive full interest on the remaining balance in your account. Furthermore, you’ll receive interest for the period the withdrawn amount remained in your account. For example, if your closing balance last year was Rs 2 lakh (200,000 rupees) and you withdrew ₹50,000 (50,000 rupees) in July, you’ll receive interest on that Rs 50,000 until June. You’ll receive interest for the entire year on the remaining Rs 1.5 lakh (150,000 rupees).

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