Pf interest rate: The government has approved 8.25% interest rate on Provident Fund (PF) account for FY 2024-25. Now the Employees Provident Fund Organization (EPFO) will soon start transferring interest amount to the accounts of more than 7 crore PF account holders.
Earlier, on 28 February 2024, it was decided to maintain 8.25% interest rate in the meeting of the Central Board of Trustees (CBT) of EPFO. This is equivalent to the previous financial year i.e. 2023-24. The CBT’s decision was sent to the Finance Ministry for approval, which has now been approved.
How much interest will be available on your PF deposit?
According to the 8.25% interest rate, if a member has a deposit of Rs 1 lakh in the PF account, then he will get an interest of Rs 8,250 annually. Similarly, if you have a balance of Rs 5 lakh in your account on 1 April 2024, then you will get Rs 41,250 as interest in the entire financial year. The EPFO pays its member interest on the opening balance for FY 2024-25.
| Balance in PF account |
Estimated annual interest (at 8.25% rate) |
| ₹ 1 lakh | ₹ 8,250 |
| ₹ 2 lakhs | ₹ 16,500 |
| ₹ 3 lakh | ₹ 24,750 |
| ₹ 4 lakhs | ₹ 33,000 |
| ₹ 5 Lakh | ₹ 41,250 |
Both employees and company contribute to PF
Under the EPF scheme, 12% of the basic salary and dearness allowance (DA) of the employee is deposited in the PF account every month. The company also contributes the same amount. However, out of the 12% of the company’s 12%, only 3.67% of the amount goes to the PF account, while the remaining 8.33% is transferred to the Employees Pension Scheme (EPS). The entire 12% contribution of the employee is deposited in the PF account.
Interest rate on EPF has been between 3% to 12%
Interest on EPF started in 1952 at a rate of 3%. It first crossed 6% in 1972 and crossed 10% mark in 1984. The decade from 1989 to 1999 is considered to be the best for PF holders, when 12% consecutive interest rates were given.
However, the process of fall in interest rates started from 1999 onwards. It remained below 9.5% since 2001. In the last seven years, the interest rate has been 8.50% or less. (See the table below to know the complete history of PF)
| Year | Interest rate |
| 1952-66 | 3.00% – 4.75% |
| 1967-75 | 5.00% – 7.00% |
| 1976-83 | 7.50% – 8.75% |
| 1984-89 | 9.25% – 11.80% |
| 1990-99 | 12.00% |
| 2000-01 | 11.00% |
| 2001-05 | 9.50% |
| 2006-10 | 8.50% – 9.50% |
| 2011-21 | 8.25% – 8.50% |
| 2021-22 | 8.10% |
| 2022-23 | 8.15% |
| 2023-24 | 8.25% |
| 2024-25 | 8.25% |
How is PF’s interest rate fixed?
The process of fixing the interest rate on PF takes place at the end of the financial year. First, the Finance, Investment and Audit Committee analyzes the investment and income deposited that year. After this, the interest rate is proposed at the CBT (Central Board of Trustees) meeting. The last seal on this is imposed on the Ministry of Finance, after which the new rate is formally implemented.
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