Government Approves Interest Rate Of 8.25% On Employees’ Provident Fund For FY25

The Union Government has approved an interest rate of 8.25% on the employees’ provident fund for the fiscal year 2024-25 (FY25).

The Union Minister for Labour & Employment, Dr Mansukh Mandaviya had chaired the 237th meeting of the Central Board of Trustees (CBT), EPF in New Delhi, in which this recommendation was made.

The CBT during this meeting had recommended an 8.25% annual rate of interest to be credited on Employees’ Provident Fund (EPF) accumulations in members’ accounts for FY25.

Following the official ratifi9cation, the EPFO will credit the rate of interest into the accounts of the subscribers.

As compared to many other fixed-income instruments, the Employees’ Provident Fund (EPF) offers relatively high and stable returns, ensuring steady growth of savings.

Additionally, the interest that is earned of EPF deposits is tax-free (up to a specified limit), which makes it a highly attractive investment tool for salaried professionals.

After the actuarial valuation of the Employees’ Deposit Linked Insurance (EDLI) scheme, the Board approved significant modifications in the scheme to provide enhanced financial security as well as support to the families of members.

He added that a minimum insurance benefit of Rs 50,000 will be provided in cases where an EPF member dies without completing one year of constant service.

This amendment is expected to give higher benefits for over 5,000 cases of deaths in service every year.

As part of the revised EDLI scheme, if a member passes away within six months of their last contribution received, the EDLI benefit will be admissible, provided the member’s name is not struck off from the rolls, an ANI report said.

The report 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 level benefits for the scheme.