EPFO Interest 2024-25: Employees Provident Fund Organization (EPFO) has started depositing interest money in PF account for FY 2024-25. This time the central government has fixed an interest rate of 8.25%. This rate will be applicable to about 7 crore subscribers of EPFO. This interest on EPF is tax-free and in a long time a strong return is considered a safe investment option.
How much interest will be in PF account?
How much interest you will get in your PF account, it is decided by the amount present in it. If you have ₹ 1 lakh in your PF account, then you can get an annual rate of ₹ 8,250 per annum of 8.25%. You can see the calculation of interest received on PF balance of ₹ 1 to ₹ 15 lakh in the table below.
| EPF Balance | Annual interest |
Monthly average interest |
| ₹ 1 lakh | ₹ 8,250 | ₹ 687.50 |
| ₹ 3 lakh | ₹ 24,750 | ₹ 2,062.50 |
| ₹ 5 Lakh | ₹ 41,250 | ₹ 3,437.50 |
| ₹ 10 Lakh | ₹ 82,500 | ₹ 6,875.00 |
| ₹ 15 lakhs | ₹ 1,23,750 | ₹ 10,312.50 |
Note: These figures are given as a static corpus. If an employee contributes to PF every month, the real interest may be more than compounding.
When and how do you get interest on PF?
EPF interest is levied on closing balance of every month, but it connects to your account only once a year. This time is usually after the financial year, when the interest rate gets the approval of the government. Interest on PF account is based on compounding. This means that interest is added to the increasing balance every month.
Does the interest received on PF tax?
If an employee contributes up to ₹ 2.5 lakh in PF account in one financial year, then the interest on it will be tax free. In this, the employer is not counted by your company. If an employee contributes more than ₹ 2.5 lakh in a financial year, then the interest on additional amount will come under the tax. In case of government employees, this limit is up to ₹ 5 lakh.
Is EPF beneficial in terms of investment?
- 8.25% interest rate is higher than bank FD and PPF in the current market.
- This is a safe option due to government guarantee and tax exemption.
- EPF is a long -term strong plan as a retirement fund.
EPF not only prepares financial cushions for retirement, but due to tax exemption and stable interest, it remains quite reliable saving tools for the middle class salary class. The EPFO now allows complete transparency and easily check check through the UAN portal. With this, you can keep a close watch on your investment.
Also read: How does PF contribute, withdrawal and interest? What are the rules for employees and employers?