For the second year in a row, the Employees’ Provident Fund Organisation has kept its deposit interest rate steady at 8.25%, with long-term stability being prioritised over short-term hikes.
The Employees’ Provident Fund Organisation (EPFO) has decided to keep the interest rate on provident fund deposits unchanged at 8.25 per cent for the financial year 2025-26. This marks the second year in a row that the rate has been held steady. The decision was taken during the 239th meeting of the Central Board of Trustees (CBT).
The CBT’s recommendation will now be sent to the Ministry of Finance for approval. Once cleared, the Ministry of Labour and Employment will issue a formal notification, after which EPFO will begin crediting interest to subscribers’ accounts. This process usually takes a few months. For instance, last year’s rate was approved in May and credited by July. If the same timeline is followed, subscribers can expect the FY26 interest to be credited between June and August 2026.
Many members had hoped for a rate hike to help offset inflation. However, EPF rates are not directly linked to inflation or market movements. Instead, they depend on returns from EPFO’s investments, which include exchange-traded funds (ETFs) tracking indices like the Sensex and Nifty, as well as other financial instruments. Officials explained that without a sustained rise in investment yields, raising the rate would mean dipping into reserves, something the fund avoids to ensure long-term stability.
Over the past decade, EPF rates have seen several changes. The rate was 8.25 per cent in 2023-24, slightly higher than the 8.15 per cent in 2022-23. In 2021-22, it dropped to 8.10 per cent, the lowest in over 40 years. Earlier, it stood at 8.50 per cent in 2020-21 and 8.65 per cent in 2018-19. Looking further back, rates ranged between 8 and 8.80 per cent across different years.
