New EPF Scheme 2026: How provident fund interest will be credited by EPFO

New EPF interest payment rules

Interest payment rules have been explained under Paragraph 42 of the new EPF Scheme 2026. Here's what it says:

The interest will be credited to EPF members' accounts at the rate decided by the Central Government. This interest will be credited to the member's account on a monthly running balance basis with effect from the last day in each year in the following manner:

• On the amount at the credit of a member on the last day of the preceding year, less any sums withdrawn during the current year: Interest will be credited for the full 12 months.

• On sums withdrawn during the current year: Interest from the beginning of the current year up to the last day of the month preceding the month of withdrawal

• On all the sums credited to the member's account after the last day of the preceding year: Interest from the first day of the month succeeding the month of credit to the end of the current year.

Apart from the above, the new rules say that the total amount of interest will be rounded to the nearest rupee (fifty paise or more to be counted as the next higher rupee).

In the case of a claim for withdrawal on retirement or death, the EPF interest will be paid up to the date of the final payment.

"In the case of a claim for the withdrawal under paragraph 49 or paragraph 50 of the Scheme, interest shall be payable up to the date on which the final payment is authorised, irrespective of the date of receipt of the claim from the claimant concerned," the new rules say.

Paragraph 49 of EPF Scheme 2026 deals with retirement provisions, while Paragraph 50 deals with death provisions.

Which rate will be credited?

The rate of interest allowed on claims for withdrawal of the current year will be the rate fixed for the financial year in which the withdrawal is authorised by EPFO.

The rate of interest allowed on claims for withdrawal for the current year will be the last declared rate on the EPF.

If the rate declared for any current year happens to be less than the previous year's declared rate, then it will accrue as a bonus to the outgoing members. It will also be incorporated into the calculation for deriving the current year's rate of interest at the end of the year, and the claims settled under this proviso will be final.

How will the government decide EPF interest rate?

"In determining the rate of interest, the Central Government shall satisfy itself that there is no overdrawal on the Interest Suspense Account as a result of the debit thereto of the interest credited to the accounts of members," the new rules say.

When interest will not be credited

Interest will not be credited under the following two circumstances:

1)Interest will not be credited to the account of a member from the date on which it has become inoperative account.

2)Interest will not be credited to the account of a member if he informs the Commissioner in writing that he does not wish to receive it. However, if the member subsequently asks for interest, it will be credited to his account with effect from the first day of the period of currency in which he makes such request.