Is EPFO Going To Increase Interest Rate On PF Deposits? Here’s What The Govt Says

As the financial year 2025-26 is just around the corner, speculation is making rounds on whether the government is planning any increase in the interest rate on Employees’ Provident Fund (EPF) deposits.

Many PF account holders would be eagerly waiting to see if the Employees’ Provident Fund Organisation (EPFO) is willing to offer a better return on their hard-earned savings. The government has recently responded to these queries in the Lok Sabha by clarifying its stance on interest rates, higher fund pensions and recent changes to the Employees’ Deposit Linked Insurance (EDLI) scheme.

So, is EPFO going to Increase the Interest Rate?

In a reply to some questions asked in the Lok Sabha, the Ministry of Labour and Employment said that EPFO credits interest to member’s accounts based on monthly running balances wherein interest is finalised and credited at the end of each financial year.

The interest rate is determined by the returns EPFO has earned on investments in government securities, debt instruments, and equities, as per the notified investment pattern.

However, it did not indicate whether there will be an increase for the upcoming financial year.

This means that any change in the EPF transfer will depend on how well EPFO’s investment will perform over the year. Typically, the Central Board of Trustees (CBT) of EPFO reviews and decides the interest rate in its annual meeting before seeking approval from the Ministry of Finance.

The EPFO in its 237th meeting held earlier in March had kept the interest rate unchanged for the financial year 2024-25 at 8.25 per cent.

SC’s Order on Higher PF Pension

The government also provided an update on the implementation of the Supreme Court’s 2022 ruling regarding higher provident fund pensions. According to Shobha Karandlaje, Minister of State for Labour and Employment the retirement fund regulatory body has taken many steps to comply with the court’s directions, including launching an online facility for members to submit joint option forms.

As of now, around 17.49 lakh applications have been submitted successfully. To further speed up this process, EPFO has also been conducting virtual meetings with employers to ensure timely submission of wage details and required clarifications.

In addition to this, field offices have also been equipped with extra staff and help desks to assist employees, the minister stated. The deadline for employers to submit wage details was extended multiple times, with the final opportunity given until January 31, 2024.

What are the recent changes in the Employees’ Deposit Linked Insurance (EDLI) Scheme?

Apart from updates on interest rates and pensions, the EPFO has also announced some key changes in the EDLI scheme which provides financial assistance to the families of deceased employees.

The CBT approved the following changes:

Minimum Assurance Benefit: Previously, an employee had to complete at least one year of service for their family to be eligible for EDLI benefits. Now, the minimum service requirement has been removed, ensuring that families receive benefits even if the member dies within the first year of employment.

Relaxation in Contribution Requirements: If an employee passes away and has not contributed to the EDLI scheme for a certain period before their death, their family will still be eligible for benefits.

Continuity of Service: If an employee moves from one job to another and experiences a short gap in service, that period will now be considered as a continuation under the EDLI scheme, ensuring that employees do not lose their insurance coverage.

While EPFO has not yet confirmed an interest rate hike for PF deposits, it has assured members that the set interest is credited based on investment performance.