EPFO Retains 8.25% Interest on PF Deposits for FY 2024-25

The Employees’ Provident Fund Organisation (EPFO) has announced the interest rate for the financial year 2024-25, fixing it at 8.25 per cent. According to some reports, the Central Board of Trustees (CBT) decided on this rate in a meeting held today (February 28).

Following the board’s decision, this proposed interest rate will go to the Ministry of Finance for final approval. Once the ministry gives its nod, the new rate will be credited to the EPF account of over seven crore EPFO members.

The rate remains unchanged since last year; for FY24, it was increased to 8.25 per cent, marking a three-year high. It was set at 8.15 per cent, and 8.10 per cent in FY23 and FY22, respectively.

The interest rate of 8.10 per cent was the lowest in recent history since 1977-78 when it stood at 8 per cent.

This is how EPF interest rates have changed over the last few years;

2015-16: 8.8 per cent

2013-14: 8.75 per cent

2012-13: 8.5 per cent

According to a report by Financial Express, the retirement fund body has kept the rate unchanged this year on account of falling bond yields.

How Is It Calculated?

The interest on EPF deposits is calculated monthly but credited to accounts at the end of each financial year.

It is important to note that accounts that remain inactive for 36 months (or more) stop earning interest and become dormant.

Key Changes By EPFO

The retirement fund body recently announced some key changes, to be implemented in this year, which are set to overhaul various facilities and create a user-friendly system.

EPFO is working to revamp its I-T system and create a 'centralised database’ to initiate a centralised payment system. This database will keep records of a subscriber in one place, even if they shift locations.

Banking on this data, EPFO is expected to roll out a facility which will enable EPF subscribers to withdraw funds via the Unified Payments Interface (UPI). Additionally, the organisation is further working on a withdrawal facility wherein subscribers will be able to withdraw their PF balance from ATMs using EPFO ATM cards. This service is supposed to be operation by the mid-2025.