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EPFO Interest Rate: There is a very important news for more than 7.5 crore employed people of the country. The picture of profit on the part which is deducted from your salary every month and deposited in the provident fund (PF) account, is now clear. Employees Provident Fund Organization (EPFO) has announced the interest rates for the financial year 2025-26. The organization's supreme body 'Central Board of Trustees' (CBT) has decided that this time also interest will be given on PF deposits at the rate of 8.25 percent only. This simply means that there has been no reduction in the returns on your deposited capital.

EPFO rates remain stable for the second consecutive year

Even in the last financial year 2024-25, the return on PF was fixed at only 8.25 percent. Earlier, in 2023-24, the organization had increased it marginally from 8.15 to 8.25 percent. Experts believe that this step of EPFO ​​is a clear indication that it wants to provide a fixed and secure income to its investors without any risk. Now this proposal of CBT will be sent to the Finance Ministry for final approval. As soon as formal approval is received from there, this rate will be implemented in the accounts of subscribers across the country.

When and how much interest was received?

If we look at the data of the last few years, there has been a lot of fluctuation in the interest rates of PF. In the year 2021-22, the interest rate had fallen to 8.10 percent, which was the lowest level in the last four decades after 1977-78. At that time the concerns of the employees had naturally increased. On the contrary, in the year 2015-16, employees got excellent returns of up to 8.80 percent. Whereas in 2020-21 and 2019-20 this rate was 8.50 percent.

How are PF returns decided?

This question definitely comes in the mind of the common taxpayer that how are these rates decided. Actually, EPFO ​​invests the money deposited by you in different places. These include bond yield, government securities and stock market (equity). The new interest rate is proposed after assessing the income earned from this entire investment portfolio in a year. The current market conditions play an important role in this entire process. The CBT decides the new rate only after a complete calculation of the earnings, which requires the final approval of the Finance Ministry.

How much will it affect retirement planning?

Even though there has been no new increase in interest rates this time, the return of 8.25 percent is still much better and competitive than many traditional savings options available in the market. If you compare it with the normal fixed deposit (FD) of the bank, then PF is still a more profitable deal. PF is primarily a long term investment. The power of 'compounding' (compound interest) works in this.