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EPF at 8.25%: 5 things to know before choosing retirement portfolio
The Employees' Provident Fund has been recommended an interest rate of 8.25% for FY 2025-26, which can serve as the stable debt portion of a retirement portfolio. While EPF offers guaranteed returns,…
The Employees' Provident Fund has been recommended an interest rate of 8.25% for FY 2025-26, which can serve as the stable debt portion of a retirement portfolio. While EPF offers guaranteed returns, equities historically provide higher long-term growth but come with market volatility and no assured returns.
Financial advisers suggest that younger investors can allocate a larger share to equities through vehicles like the National Pension System or mutual funds, while those nearing retirement should have a higher EPF allocation for stability. EPF contributions also enjoy tax benefits under Section 80C, with the interest being tax-free up to Rs 2.5 lakh per year for non-government employees.
The recommended rate still requires government notification before becoming official. Investors should consider their risk appetite and retirement timeline when deciding how much to put into EPF versus equities, says the report.
Indian Opinion Analysis
The EPF interest rate is set annually by the Central Board of Trustees and then notified by the government. For savers nearing retirement, the 8.25% rate compounds tax-free, while equity returns are taxable on capital gains beyond Rs 1 lakh. The key trade-off is safety: EPF is backed by sovereign guarantee, whereas market-linked products like the National Pension System expose investors to volatility. The actual notified rate for FY25-26 will be confirmed when the finance ministry formally approves the trustees' recommendation.
Source: ndtv.com
This brief was synthesised by AI from the source linked above.
