PF interest rate: EPFO likely to keep PF deposit rate unchanged at 8.25% for FY 2024-25; meeting on Feb 28

The central board of the provident fund body EPFO is expected to recommend an 8.25% interest rate for the financial year 2024-25 in its meeting on February 28, according to reports.

The Central Board of Trustees, the apex decision-making body of the Employees’ Provident Fund Organisation (EPFO), is scheduled to meet on February 28 to decide on the interest rate for FY25.

The Union Labour Minister heads the board and comprises representatives of trade unions, state and central government representatively, employees’ body members and employers’ representatives.

The central board of EPFO is likely to retain the interest rate at 8.25% for FY 2024-25, the same as for FY 2023-24. The current interest rate is the highest in the previous three financial years.

The Central Board of Trustees recommends the interest rate to the Finance Ministry, which is the final decision-making body on the rate of interest. The interest rate is fixed for each financial year.

After the concurrence of the Finance Ministry, the interest rate becomes applicable to the members' EPF deposits for a particular financial year. The interest earnings are calculated monthly and credited to the members' EPF accounts at the end of the financial year.

Notably, the interest rate of 8.1% announced for FY22 was the lowest return given by EPFO in recent history. Before FY22, EPFO gave interest of 8% in 1977-78. EPFO raised the interest rate to 8.25% for FY24, the highest in three years. In FY23, it was 8.15%, up from 8.1% in FY22.

The EPFO approved the highest interest rate of 9.5% for FY 2010-11. However, since 2019-20, it has retained the interest rates below 8.5%. The EPFO announces the interest rate based on the performance of its investments. The EPFO invests provident fund money in bonds and equity instruments.