EPFO Interest Rate: According to a report, in a major reform for members, the Employees’ Provident Fund Organization (EPFO) is considering increasing the salary limit for mandatory contributions to the provident fund and its pension scheme. Currently, the salary limit for joining the EPFO is Rs 15,000 per month. Raising the salary limit would increase the pension for private employees. Currently, employees whose PF is deducted under the EPS and who have worked for at least 10 years receive a pension after the age of 58. Furthermore, they also earn interest on the PF deposits.
“PF deduction” refers to the Employee Provident Fund (EPF) deduction, which is 12% of an employee’s basic salary and dearness allowance (DA) and is deducted from their salary every month. The employer pays this amount to the Regional PF Commissioner. The employer’s share is divided, with 8.33% going to the pension fund and the remaining 3.67% going to the provident fund. The employer’s contribution to the pension fund is limited to a fixed amount to ensure it does not exceed a certain limit for the pension fund’s sustainability.
How many times a year is interest earned on PF money?
The EPFO pays interest on PF deposits once a year. The interest rate on Employee Provident Fund (EPF) deposits for the financial year 2024-25 is 8.25% per annum, as approved by the central government. This rate is the same as the previous financial year (2023-24) and applies to contributions made between April 1, 2024, and March 31, 2025.
Following the annual review by the EPFO’s Central Board of Trustees and approval from the Finance Ministry, the interest rate for FY 2025-26 is expected to be announced around February 2026. The Employees’ Provident Fund Organisation (EPFO) will decide the rate at its Central Board of Trustees meeting, and final approval will be obtained from the central government.
What will be the interest rate for 2025-26?
The government is expected to announce the interest rate for this financial year in January. Sources in the Ministry of Labor and Employment say that an interest rate of up to 9.25% could be announced for the financial year 2025-26.
This means a 1% increase compared to last year. This decision could be made at a meeting of the Central Board of Trustees. It is believed that this interest rate will benefit more than 70 million employees.
If the central government announces a 9.25% interest rate for the financial year, a substantial amount is sure to be deposited into their accounts. If an employee has Rs 6 lakh in their PF account, up to Rs 55,000 can be transferred at 9.25% interest. If, for some reason, an employee’s PF account balance is Rs 5 lakh, the government will deposit up to Rs 46,000 into their account.
7 crore employees will benefit
This will benefit more than 7 crore employees. This amount will prove beneficial to employees in times of inflation. The central government has been paying interest on PF deposits every year. You can check whether interest has been credited to your account in a few steps. The process is quite simple.
