New Delhi, May 24 – In a move that impacts over 7 crore salaried employees across Indiathe Employees’ Provident Fund Organization (EPFO) will continue to offer 8.25% interest on Provident Fund (PF) deposits for the financial year 2024–25following 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, 2024and 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 employerof which:

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 1972and 10% in 1984. The golden period for PF subscribers was from 1989 to 1999when interest rates peaked at 12%. However, since 2001, the rate has remained below 9.5%and in the last seven yearsit 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 Committeewhich assesses EPFO’s earnings from investments. Based on this, the CBT recommends a ratewhich 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 instrumentespecially 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 kiranhis insights are shaped by decades of hands-on reporting and editorial leadership in the fast-evolving world of technology.