EPFO interest rate for FY25 set at 8.25%: Here's what it means for you

Good news for India's salaried workforce: the Government of India has ratified the rate of interest of EPF (Employees Provident Fund) at 8.25 per cent for FY25. This would ensure stable and relatively high returns for over seven crore EPFO subscribers in the country.
The move, green-lit by the Ministry of Finance, enables the Employees' Provident Fund Organisation (EPFO) to begin crediting the annual interest into the accounts of millions of workers.

The decision, as per reports, was finalised at the 237th meeting of the Central Board of Trustees, chaired by Labour & Employment Minister Mansukh Mandaviya.

"The Ministry of Finance has given concurrence to an 8.25 per cent rate of interest on the EPF for the 2024-25 fiscal year, and the labour ministry sent a communication regarding this to the EPFO on Thursday," revealed a labour ministry official while speaking to news agency PTI.

This marks the second consecutive year the interest rate has been maintained at 8.25 per cent.

Key highlights: What you need to know

- 8.25 per cent Interest Rate on EPF for FY25

- Interest is tax-free (up to a specified limit), which is a big plus for salaried professionals

- New EDLI (Employees' Deposit Linked Insurance) benefits announced: ₹50,000 minimum life insurance for deaths even within the first year of service. Furthermore, EDLI payouts are now available even if there's a two-month gap between jobs.

This is expected to result in higher benefits to families of over 5,000 individuals who die during service every year, ensuring a wider safety net for them.

EPFO interest rates

Going back five years, the EPFO interest rate between 2020 and 2021 was 8.50 per cent. In 2021-22, it was reduced to 8.10 per cent (the lowest since 1977-78). The next year, 2022-23, it was increased slightly to 8.15 per cent. Last year, 2023-24, it was increased further to 8.25 per cent.