The Finance Ministry of India has approved an 8.25% interest rate for Employees’ Provident Fund (EPF) deposits for the financial year 2024–25, maintaining the same rate as FY 2023–24. This decision, benefiting over 70 million salaried individuals, ensures the scheme remains a preferred investment choice due to its tax benefits and relatively high returns.
The Government of India has approved an interest rate of 8.25% for Employees’ Provident Fund (EPF) deposits for the financial year 2024–25, ensuring continued support for over 70 million salaried employees across the country.
The Employees’ Provident Fund Organisation (EPFO), a statutory body under the Ministry of Labour and Employment, manages this scheme. It is one of the largest social security organizations in the world in terms of the number of covered beneficiaries and the volume of financial transactions undertaken.
The Central Board of Trustees of EPFO, during its 237th meeting in February 2025, proposed retaining the 8.25% rate. The Labour Ministry then forwarded the recommendation to the Ministry of Finance, which has now given its approval.
The approved rate is unchanged from FY 2023–24, highlighting the scheme’s consistent performance and the government’s intention to offer stable and attractive returns to working professionals. Compared to other fixed-income instruments, the EPF continues to deliver one of the highest risk-free interest rates, making it a preferred long-term investment for retirement planning.
Besides offering stability, EPF returns are tax-free up to the permissible limit, adding to its attractiveness. The interest earned does not attract tax under Section 10 of the Income Tax Act, provided the annual employee contribution is within the tax-free threshold of ₹2.5 lakh.
Historical Insight
The interest rate on EPF has seen significant changes over the decades. As per the EPFO’s historical data, the rate was just 3% in 1952–53, rising steadily over the years. It peaked at 12% in 1992–93, a rate that remained for several years before gradually declining in line with broader market trends. In recent years, rates have stabilized around the 8–8.5% mark, balancing returns with sustainability.
