Govt ratifies interest rate at 8.25% on employees' provident fund for FY25

The government has ratified the rate of interest on employees' provident fund at 8.25 per cent for FY25, enabling retirement fund body EPFO to deposit the annual interest accumulation in the post-retirement funds of over 7 crore subscribers.

The approved rate of interest for 2024-25 was sent for concurrence of the Ministry of Finance.  Now the interest amount as per the rate ratified for FY25 will be credited into the accounts of over seven crore subscribers of EPFO.

The decision on interest rate was taken at the 237th meeting of the central board of trustees of the EPFO chaired by Union Minister for Labour & Employment Mansukh Mandaviya in New Delhi on February 28.

Compared to many fixed-income instruments, EPF offers relatively higher and stable returns, ensuring steady growth on post-retirement savings.

In February 2024, the EPFO had increased the interest rate marginally to 8.25 per cent for 2023-24, from 8.15 per cent in 2022-23.

In March 2022, EPFO had lowered the interest on EPF for 2021-22 to an over four-decade low of 8.1 per cent, from 8.5 per cent in 2020-21.

The 8.10 per cent rate of interest on EPF for 2020-21 was the lowest since 1977-78, when it stood at 8 per cent.