New Delhi, May 24 – In a move that impacts over 7 crore salaried employees across India, the Employees’ Provident Fund Organization (EPFO) will continue to offer 8.25% interest on Provident Fund (PF) deposits for the financial year 2024–25, following approval from the Ministry of Finance.
The announcement comes after the Central Board of Trustees (CBT) of EPFO had recommended maintaining the interest rate during its meeting held on February 28, 2025. With the finance ministry now giving its nod, the interest will soon be credited to the accounts of PF subscribers across the country.
What This Means for PF Subscribers
At an 8.25% interest rate, subscribers with ₹1 lakh in their PF account will earn ₹8,250 in annual interest. Similarly, a PF balance of ₹5 lakh will fetch ₹41,250 in interest over the course of the financial year.
Interest is calculated based on the opening balance as of April 1, 2024, and accrues monthly but is deposited at the end of the fiscal year.
PF Contributions: A Joint Effort
Under the EPFO Act, 12% of an employee’s basic salary plus dearness allowance (DA) is contributed by the employee to their PF account. An equal 12% is contributed by the employer, of which:
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3.67% goes directly into the PF account
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8.33% is allocated to the Employee Pension Scheme (EPS)
The employee’s entire 12% contribution is directed to the PF account, making it a long-term savings tool with steady interest income.
Historical Interest Rate Trends
The PF interest journey began in 1952 at 3%. It crossed 6% in 1972, and 10% in 1984. The golden period for PF subscribers was from 1989 to 1999, when interest rates peaked at 12%. However, since 2001, the rate has remained below 9.5%, and in the last seven years, it has hovered around 8.5% or lower.
How EPF Interest Rate Is Decided
The PF interest rate is usually finalized at the end of each financial year. The process begins with a meeting of the Finance, Investment, and Audit Committee, which assesses EPFO’s earnings from investments. Based on this, the CBT recommends a rate, which is then reviewed and approved by the Ministry of Finance.
This structured decision-making ensures that PF returns remain stable and sustainable while balancing market realities.
Key Takeaway
The retention of the 8.25% interest rate is seen as a positive move for salaried professionals seeking secure long-term retirement savings. With the growing popularity of equity-linked investments, PF remains a low-risk, fixed-return instrument, especially valuable in volatile market environments.
Bhupendra Singh Chundawat is a seasoned technology journalist with over 22 years of experience in the media industry. He specializes in covering the global technology landscape, with a deep focus on manufacturing trends and the geopolitical impact on tech companies. Currently serving as the Editor at Udaipur Kiran, his insights are shaped by decades of hands-on reporting and editorial leadership in the fast-evolving world of technology.
PF Interest Rate for 2024-25 Retained at 8.25%: Over 7 Crore Employees to Benefit
