8.25% interest rate on PF deposits for 2025-2026

By Shiva Rajora
NEW DELHI: Amid weak market conditions and falling interest rates, Employees Provident Fund Organisation (EPFO) on Monday recommended retaining the interest rate on retirement savings accumulated by nearly 31 crore unchanged at 8.25% during the current financial year. This is the third consecutive year that the social security organisation has kept the rate unchanged, after raising it in 2023-24 from 8.15% in 2022-23.

In 2021-22, the interest rate plunged to a four-decade low of 8.1%.

"EPFO has maintained strong financial discipline, ensuring stable and competitive returns without straining the interest account. It benefits crores of workers by strengthening their retirement security," labour ministry said in a statement.

The decision, taken at a meeting of the central board of trustees (CBT) chaired by labour minister Mansukh Mandaviya, came ahead of crucial assembly elections in West Bengal, Tamil Nadu, Kerala and Assam. The rate recommended by EPFO's top decision-making body will need to be ratified by the finance ministry before subscribers can get the interest income into their account.

"EPFO's aim is clear, as it remains committed to safeguard member contributions from market volatility and delivering prudent, sustainable, and attractive returns compared to other similar investment avenues. For this purpose, IIM Kozhikode has also been asked to look into the possibility of creating an interest stabilisation reserve, which will help us deliver consistent returns in case of volatility," an official told TOI.

EPFO has nearly 7.5 crore active members and a corpus of nearly Rs 30 lakh crore invested in govt securities, stocks and corporate bonds. As of Dec 31, it had invested nearly 88% in govt bonds and 10.6% in equities. Between April and Feb of the current fiscal year, its income was estimated at over Rs 1.4 lakh crore.