EPF Latest Update
The Employees’ Provident Fund Organization (EPFO) has decided to keep the interest rate on Employees’ Provident Fund (EPF) deposits at 8.25% for the financial year 2024-25. This decision was made during a meeting of the Central Board of Trustees (CBT) on February 28, 2024, as reported by the news agency PTI.
Interest Rate Remains the Same for 2024-25
The interest rate of 8.25% is the same as last year (2023-24). In February 2024, EPFO had increased the interest rate slightly from 8.15% in 2022-23 to 8.25% for 2023-24.
A source mentioned that the CBT, which is the highest decision-making body of EPFO, finalized the 8.25% interest rate in the meeting held on February 28. However, before this rate is officially implemented, it needs approval from the Ministry of Finance. Once the government ratifies it, the interest amount will be credited to the accounts of over 7 crore EPFO subscribers.
Impact on Employees
This decision will directly affect more than 6.5 crore (65 million) subscribers of EPFO. Employees who contribute to the EPF will receive the same interest rate as last year.
EPFO has seen positive financial growth in the past year. There has been an increase in returns on investments, and more people have joined the EPF scheme. However, EPFO has also seen a rise in claims made by members, which has resulted in higher payouts.
Higher Claims Processed by EPFO
According to a report from the Economic Times (ET), EPFO has settled over 5 crore claims in 2024-25 so far. The total amount paid in these claims is around Rs 2.05 lakh crore. In comparison, EPFO settled 4.45 crore claims in 2023-24, with a total payout of Rs 1.82 lakh crore. The increase in claim settlements means that more EPF subscribers have withdrawn money from their accounts.
EPF Interest Rates Over the Years
EPFO’s interest rate has changed multiple times over the years. Here is a look at how it has fluctuated:
2024-25: 8.25%
2023-24: 8.25%
2022-23: 8.15%
2021-22: 8.1% (lowest in 44 years)
2020-21: 8.5%
2019-20: 8.5%
2018-19: 8.65%
2017-18: 8.55%
2016-17: 8.65%
2015-16: 8.8%
2014-15: 8.75%
2013-14: 8.75%
2012-13: 8.5%
2011-12: 8.25%
The lowest interest rate in recent history was in 2021-22 when it dropped to 8.1%, the lowest since 1977-78. In 2019-20, the interest rate was lowered to 8.5% from 8.65% in 2018-19. The highest rate in recent years was 8.8% in 2015-16.
Approval Process for Interest Rate
The interest rate decided by the CBT is not final until the Ministry of Finance approves it. Once the government ratifies the decision, EPFO will credit the interest amount into the accounts of its subscribers.
Financial Performance of EPFO
In the last financial year, EPFO saw good investment returns and an increase in its subscriber base. More employees joined the EPF scheme, and the overall financial health of EPFO improved. However, there was also a significant increase in withdrawals, as seen in the higher number of claim settlements.
What This Means for EPF Subscribers?
For employees contributing to EPF, this decision means that their savings will earn an interest rate of 8.25% for the financial year 2024-25. This rate is considered reasonable compared to other fixed-income investment options.
Employees should note that EPF is a long-term savings scheme designed for retirement. While the interest rate fluctuates yearly, it remains one of the safest investment options, as the government backs it.
Subscribers can check their EPF balance through the official EPFO website, mobile app, or by sending an SMS. Once the interest is credited, employees will see the updated balance in their accounts.
Conclusion
EPFO’s decision to retain the 8.25% interest rate for 2024-25 will benefit over 7 crore subscribers. The financial year saw increased investments and a rise in claims, but EPFO remains financially stable. While the interest rate is lower than some past years, it is still competitive and ensures steady returns for employees’ retirement savings.
Employees should keep track of their EPF accounts and stay informed about any changes in interest rates or withdrawal rules. Since EPF is a crucial part of retirement planning, maintaining contributions can help build a strong financial future.