EPFO Update: Good News! Hike on Interest Rates On Cards! Check Details

This week is crucial for over 7 crore Employee Provident Fund Organization (EPFO) account holders, as the Central Board of Trustees (CBT) is set to meet on February 28, 2025. The meeting, chaired by Union Minister of Labour and Employment, Mansukh Mandaviya, is expected to determine the interest rate for the financial year 2024-25.

In the previous financial year (2023-24), EPFO had offered 8.25% interest, which was higher than 8.15% in 2022-23 and 8.10% in 2021-22. Given strong investment returns this year, it is anticipated that the same 8.25% rate may continue.

Interest Stabilization Reserve Fund Proposal Likely

A significant discussion in the meeting may also be regarding the creation of an Interest Stabilization Reserve Fund. This proposed fund aims to ensure stable returns for EPFO subscribers, even during fluctuating interest rates or low investment returns. If approved, it could be implemented from 2026-27.

Significance of EPFO for Private Sector Employees

EPFO is India's largest social security scheme for private sector employees. A fixed portion of an employee’s salary is deducted monthly as Provident Fund (PF), with equal contributions from employers. Account holders can withdraw PF in cases of job loss, home purchase, marriage, education, or retirement.

Once the CBT finalizes the interest rate, the proposal will be sent to the Finance Ministry for approval. The decision will be closely watched by employees, trade unions, and financial experts, as it directly impacts millions of workers in India.