savingNew Delhi โ
Indiaโs retirement savings body, the Employees’ Provident Fund Organisation (EPFO), has retained the interest rate on Employeesโ Provident Fund (EPF) deposits at 8.25% for the financial year 2025โ26.
The decision was approved by the EPFOโs Central Board of Trustees, which reviews the fundโs performance and determines the annual interest rate for EPF subscribers.
This marks the third consecutive year that the interest rate has remained unchanged at 8.25%.
EPFO Interest Rate History
EPFO interest rates have fluctuated slightly in recent years depending on returns generated from the organisationโs investment portfolio.
Recent EPF interest rates:
| Financial Year | Interest Rate |
|---|---|
| FY23 | 8.10% |
| FY24 | 8.25% |
| FY25 | 8.25% |
| FY26 | 8.25% |
EPFO invests a large portion of its corpus in government securities, bonds, and exchange-traded funds linked to equities, which generate returns used to pay interest to subscribers.
What It Means for EPF Subscribers
For millions of salaried employees in India, the decision means stable and relatively attractive returns on their provident fund savings.
Compared with many traditional fixed-income instruments such as bank fixed deposits, the EPF interest rate remains competitive.
EPFO currently has over 70 million active contributing members and more than 280 million total accounts, making it one of the worldโs largest social security organisations.
How EPF Contributions Work
Under Indiaโs provident fund system:
- Employees contribute 12% of their basic salary and dearness allowance to their EPF account.
- Employers also contribute 12%, although a portion of the employerโs contribution is allocated to the Employeesโ Pension Scheme (EPS).
The combined contributions accumulate over time, creating a long-term retirement savings pool for employees.
Interest on EPF balances is calculated monthly but credited annually at the end of the financial year.
Tax Benefits and Withdrawal Rules
EPF remains one of the most tax-efficient retirement savings options available to Indian workers.
Key rules include:
- Interest earned on EPF balances is generally tax-free within prescribed limits.
- Withdrawals after five continuous years of service are exempt from income tax.
- Partial withdrawals are permitted for specific needs such as housing, education, or medical emergencies.
Subscribers can check their EPF balance through the EPFO Member Portal, the UMANG mobile app, or via SMS services.
Outlook
With interest rates unchanged at 8.25%, EPFO aims to maintain stability for Indiaโs workforce savings while balancing returns from its investment portfolio.
Financial experts say the decision reflects EPFOโs effort to ensure sustainable returns without exposing the retirement fund corpus to excessive market risk.
The Press of Asia Financial Desk will continue monitoring developments related to EPFO policy decisions and retirement savings trends in India.s.