Finance Ministry Retains EPF Interest Rate At 8.25% For Over 7.8 Crore Subscribers

New Delhi, Jun 19 (KNN) The Ministry of Finance has approved an interest rate of 8.25 percent on Employees' Provident Fund (EPF) deposits for 2025-26, retaining the same rate for the third consecutive year for over 7.8 crore contributing subscribers of the Employees' Provident Fund Organisation (EPFO).

Finance Ministry Retains EPF Interest Rate At 8.25 Percent

The rate had been recommended by the EPFO's Central Board of Trustees (CBT) in March and is now awaiting formal notification from the Ministry of Labour and Employment, expected later this month.

An official said the EPFO is likely to credit the 8.25 percent interest into subscribers' accounts during June, reported The Indian Express.

Interest Credit Process Set To Become Faster

Under the organisation's upcoming digital overhaul, interest credits are expected to be processed more quickly.

The Labour Ministry is preparing to launch EPFO 2.0 by the end of June, introducing a revamped digital ecosystem designed to improve convenience and service delivery for subscribers.

EPFO 2.0 To Enable UPI, ATM-Based Withdrawals

The upgraded system will allow subscribers to withdraw up to 75 percent of their EPF corpus directly into bank accounts through UPI and ATM channels.

The UPI-based facility, accessible through the BHIM app, is expected to particularly benefit blue-collar workers by simplifying and accelerating the withdrawal process.

The proposed rollout follows the EPFO's decision last year to streamline withdrawal provisions by reducing 13 categories to three broad segments covering essential needs, housing requirements and special circumstances.

Board Retains Higher Rate Despite Surplus Concerns

The CBT's decision to retain the 8.25 percent rate came despite suggestions from the EPFO's investment sub-committee and the Finance Ministry to lower it to 8.10 percent for 2025-26.

According to discussions during the March board meeting, maintaining the higher rate could result in an estimated loss of Rs 944.06 crore for the retirement fund body, while an 8.10 percent rate would have generated a surplus of Rs 1,675.82 crore.

The EPFO had recorded a surplus of Rs 5,480.34 crore in 2024-25.

EPF Rates Remain Above Recent Lows

The EPFO had marginally raised the EPF interest rate to 8.25 percent for 2023-24 from 8.15 percent in 2022-23 and retained the same level for 2024-25.

The 8.10 percent rate offered in 2021-22 was the lowest since 1977-78, when subscribers received 8 percent interest.

(KNN Bureau)