EPFO central board recommends retaining 8.25% interest rate for FY25

EPFO retains 8.25% interest rate on employees' provident fund deposits for 2024-25: CNBC-TV18

The Central Board of Trustees of the Employees' Provident Fund Organisation Friday recommended retaining the 8.25% interest rate for its subscribers for 2024-25 (Apr-Mar), the labour ministry said on February 28.

The interest rate would be officially notified by the Government of India, following which EPFO would credit the rate of interest into the subscribers’ accounts.

At the 237th meeting of the Central Board of Trustees of the EPFO on Friday, the central board also decided to enhance the insurance benefits under the Employees' Deposit Linked Insurance (EDLI) scheme, the ministy said in a release.

"Following the actuarial valuation of the EDLI scheme, the Board approved key modifications in scheme to provide greater financial security and support to the family of members. This will address major grievances under this category and ensure a more inclusive approach to benefit claimants," the ministry said.

Under the scheme, a minimum life insurance benefit of Rs 50,000 will be provided in cases where an EPF member dies without completing one year of continuous service. This amendment is expected to result in higher benefits for more than 5,000 cases of deaths in service, every year, the ministry added.

Under the new modifications, a gap of up to two months between two spells of employment will now be considered as continuous service, ensuring eligibility for higher quantum EDLI benefits.

In February 2024, EPFO had increased the interest rate on EPF marginally to 8.25% for 2023-24, from 8.15% in 2022-23.

In March 2022, EPFO had lowered the interest on EPF for 2021-22 to an over four-decade low of 8.1% for its over seven crore subscribers, from 8.5% in 2020-21.

The 8.1% rate of interest on EPF for 2020-21 was the lowest since 1977-78, when the EPF interest rate stood at 8%.

EPFO provides the rate of interest only after it is ratified by the government through the finance ministry.

In March 2020, EPFO had lowered the interest rate on provident fund deposits to a seven-year low of 8.5% for 2019-20, from 8.65% provided for 2018-19.

EPFO had provided 8.65% interest rate to its subscribers in 2016-17 and 8.55% in 2017-18.

The rate of interest was slightly higher at 8.8% in 2015-16. The retirement fund body had given 8.75% rate of interest in 2013-14 as well as 2014-15, higher than 8.5% for 2012-13. The rate of interest was 8.25% in 2011-12.

With inputs from PTI