EPFO Interest Rate Held At 8.25% For Second Year, Among Highest Fixed-Income Returns

In a move that could help the Employees’ Provident Fund Organisation (EPFO) to credit the annual returns into the accounts of over seven crore subscribers, the government has approved the Employees’ Provident Fund (EPF) interest rate at 8.25 per cent for the financial year 2024-25, according to a recent media report. 

The interest rate had been pending final approval from the Ministry of Finance. It was proposed during the 237th meeting of the EPFO Central Board of Trustees on February 28, chaired by Mansukh Mandaviya, the labour minister. A labour ministry official informed PTI that the finance ministry granted its approval this week.

This is the second year in a row that the EPF interest rate has been held steady at 8.25 per cent, making it one of the highest-yielding fixed-income options in the country. In 2022–23, the EPFO had slightly increased the rate from 8.15 per cent. The approved rate provides consistency and reliability for long-term savers, especially amid a backdrop of shifting market interest rates.

In February 2024, the EPFO marginally raised the interest rate to 8.25 per cent for 2023–24, up from 8.15 per cent in 2022–23. Earlier, in March 2022, the EPFO had reduced the EPF interest rate for 2021–22 to 8.1 per cent—its lowest level in over four decades—down from 8.5 per cent in 2020–21. The 8.1 per cent rate was the lowest since 1977–78, when it stood at eight per cent.