The Employees' Provident Fund Organisation (EPFO) is likely to retain the interest rate on provident fund (PF) deposits above 8%, with expectations hovering around 8.25%, similar to the previous financial year. The official announcement is set to be made on February 28, 2025, during a meeting of the EPFO’s Central Board of Trustees (CBT), where the final decision will be taken after reviewing the organisation’s financial standing and investment performance.
Sources familiar with the matter indicate that EPFO’s investment and accounts committee is currently analyzing income and expenditure data for the current fiscal year. Their goal is to propose an interest rate that ensures competitive returns for pensioners while also maintaining a surplus for unforeseen contingencies.
An official, speaking on the condition of anonymity, mentioned that EPFO has witnessed significant growth in its investments and a rise in subscriber numbers. However, there has also been a sharp increase in claim settlements, which plays a crucial role in determining the final interest rate.
EPFO’s Claim Settlements Surge
According to official data, in the financial year 2024-25, EPFO processed over 50.8 million claims worth Rs 2.05 lakh crore, marking a significant jump compared to the 44.5 million claims amounting to Rs 1.82 lakh crore settled in the previous year. This sharp increase in withdrawals and settlements puts additional pressure on the organization’s financial planning.
EPFO Interest Rate Trends Over the Years
EPFO, which currently serves over 65 million subscribers, has maintained a relatively stable interest rate in recent years.
- 2023-24: 8.25% interest on an income of Rs 1,07,000 crore
- 2022-23: 8.15% interest on an income of Rs 91,151.66 crore
- 2002-03: 9.50% interest rate, one of the highest in recent history
Although the expected rate for 2024-25 is likely to stay around 8.25%, the final decision will depend on the committee’s assessment of investment returns, claim settlements, and financial reserves.
Finance Ministry’s Role in the Approval Process
It is important to note that the proposed interest rate recommended by the EPFO and CBT is not final until it receives approval from the Finance Ministry. Only after this approval can the interest be officially notified and credited to EPFO subscribers' accounts.
With the February 28, 2025, meeting just weeks away, millions of employees and pensioners are eagerly awaiting the final decision, as it directly impacts their retirement savings and financial planning.
