The government has ratified the rate of interest on employees’ provident fund at 8.25 per cent for FY25, enabling retirement fund body EPFO to deposit the annual interest accumulation in the post-retirement funds of over 7 crore subscribers.
EPFO, on February 28, had decided to retain the interest rate of 8.25 per cent on employees’ provident fund (EPF) deposits for the financial year 2024-25, equal to the rate provided in the preceding fiscal. The approved rate of interest for 2024-25 was sent for concurrence of the Ministry of Finance.
“Ministry of Finance has given concurrence to 8.25 per cent rate of interest on the EPF for 2024-25 fiscal year and labour ministry sent a communication regarding this to the EPFO on Thursday,” a labour ministry official told news agency PTI. Now the interest amount as per the rate ratified for FY25 will be credited into the accounts of over seven crore subscribers of EPFO.
The decision on interest rate was taken at the 237th meeting of the central board of trustees of the EPFO chaired by Union Minister for Labour & Employment Mansukh Mandaviya in New Delhi on February 28. Compared to many fixed-income instruments, EPF offers relatively higher and stable returns, ensuring steady growth on post-retirement savings.
EPFO interest rate changes
In February 2024, the EPFO had increased the interest rate marginally to 8.25 per cent for 2023-24, from 8.15 per cent in 2022-23. In March 2022, EPFO had lowered the interest on EPF for 2021-22 to an over four-decade low of 8.1 per cent, from 8.5 per cent in 2020-21. The 8.10 per cent rate of interest on EPF for 2020-21 was the lowest since 1977-78, when it stood at 8 per cent.
EPFO adds 1.46 million members in March
EPFO, which manages retirement savings for salaried employees, reported a net addition of 1.46 million subscribers in March, with just over half being first-time enrollees, according to an official statement on Wednesday.
EPFO recorded 754,000 new member enrollments in March. Provisional data showed that net subscriber additions rose by 1.15% compared to March 2024, reflecting stronger employment opportunities and growing awareness of employee benefits, supported by EPFO’s outreach efforts. New subscriptions in March rose 2.03% sequentially, and were up 0.98% year-on-year.