PF Interest Rate 2024–25: Latest Updates, Calculation, and FAQs

The Employees’ Provident Fund (EPF) is a compulsory savings scheme that helps salaried individuals in India build a retirement corpus. Every month, a fixed portion of salary is contributed by both the employee and the employer, and the accumulated balance earns annual interest. The PF interest rate is therefore a critical factor in shaping long-term savings.

This article explains the current PF interest rate for 2024–25, how it is calculated, when it is credited, applicable tax rules, and answers to frequently asked questions.

PF Interest Rate 2024–25: What Is the Current PF Interest Rate?

For the financial year 2024–25, the Provident Fund interest rate has been set at 8.25%.
This rate is first recommended by the Central Board of Trustees (CBT) of EPFO and later notified by the Ministry of Finance. Once approved, the interest applies to all active EPF accounts for that year.

This means every eligible member will earn 8.25% annual interest on their PF balance for FY 2024–25.

As per the official EPFO circular on PF Interest Rate 2024–25, the rate has been fixed at 8.25% for the year.

PF Interest Rate 2023–24 vs 2024–25

The PF interest rate has remained steady over the last year.

• FY 2022–23: 8.15%
• FY 2023–24: 8.25%
• FY 2024–25: 8.25%

This stability highlights EPFO’s approach of keeping rates competitive while maintaining financial sustainability.

PF Interest Crediting Timeline

Although the rate is declared during the financial year, the actual interest crediting happens a few months after the year closes—typically between July and September.

Employees sometimes notice a delay in their passbook update. This happens because EPFO credits interest in stages.

👉 Once the updation cycle is finished, the passbook automatically shows the revised balance with interest included.

How to Check PF Interest in Your Account

Members can verify their updated PF balance and interest through multiple official channels:

• EPFO Online Passbook – Available at the EPFO portal, where users can sign in with their UAN and password to view account details.
• UMANG App – The government’s multi-service app also provides real-time PF balance updates.
• SMS/Missed Call Service – Registered users can send a text or give a missed call to EPFO’s official number to receive balance information.

PF Interest Rate Calculation: Explained Simply

PF interest is calculated every month on the running balance but credited in bulk once a year.

Steps in the calculation

1. The opening balance for the month earns interest.
2. Monthly contributions by employer and employee are added.
3. Withdrawals, if any, are deducted.
4. Interest at 8.25% is applied monthly and added up across the year.

Illustration

• Opening Balance: ₹50,000
• Monthly Contribution: ₹2,000
• Formula: (Monthly closing balance × 8.25%) ÷ 12
• At year-end, the accumulated interest is credited to the account.

According to the EPFO official FAQ on interest calculation, the method involves monthly accruals but annual crediting.

Why PF Interest Matters for Your Savings

The PF interest rate directly influences retirement wealth. Even a difference of 0.25% can make a significant impact after decades of compounding.

• Higher rates (8.25%) help the corpus grow faster.
• Lower rates (e.g., 8.15%) reduce long-term accumulation.

For employees, EPF continues to be one of the safest and government-backed investment options.

PF Interest Rate and Taxation

From April 2022, a new tax rule under Rule 9D came into effect.

• If annual employee contributions exceed ₹2.5 lakh, the interest earned on the excess becomes taxable.
• In cases where the employer does not contribute (e.g., government employees under certain schemes), the exemption limit is ₹5 lakh.

Example

• Contribution: ₹3.5 lakh
• Tax-free limit: ₹2.5 lakh
• Interest earned on the extra ₹1 lakh portion will be taxable.

This rule ensures only moderate PF contributions remain fully tax-free.

The government introduced this rule through the CBDT Rule 9D notification, making PF interest on contributions above ₹2.5 lakh taxable.

PF Interest Rate History

The data shows a gradual reduction over the last few years, though PF still offers attractive returns compared to many fixed-income products.

PF Interest Rate vs PPF Interest Rate

While both EPF and PPF are government-backed savings options, they are quite different:

• EPF (Employees’ Provident Fund): Salary-linked, mandatory for eligible employees, includes employer contribution, interest fixed annually by EPFO.
• PPF (Public Provident Fund): Voluntary savings scheme, open to all citizens, rate revised quarterly by the Government.

As of FY 2024–25:

• EPF = 8.25%
• PPF = 7.1%

Thus, EPF currently provides a higher return along with employer’s contribution.

Why PF Interest May Not Show Up Immediately

Employees sometimes panic when they don’t see the updated interest. Common causes include:

• EPFO batch updates still pending.
• Employer’s delay in depositing contributions.
• Technical lag in passbook synchronization.
• Incomplete KYC on UAN account.

👉 Importantly, employees never lose their entitled interest. EPFO ensures the credit is added, while late employers are penalized.

PF Interest Calculator: Quick Formula

To estimate interest manually:

Adding these monthly accruals across the year gives the annual figure.

👉 EPFO’s internal compounding formula is more detailed, but this calculation provides a close estimate.

Tips to Maximize PF Benefits in 2024–25

• Keep your UAN fully KYC-compliant (Aadhaar, PAN, Bank).
• Avoid premature withdrawals to allow compounding.
• Opt for Voluntary Provident Fund (VPF) for extra tax-saving investment.
• Compare with other savings tools but remember PF is risk-free and backed by the government.

FAQs on PF Interest Rate

1. What is the PF interest rate for FY 2024–25?
It is 8.25%, approved by the Ministry of Finance.

2. When will PF interest be credited?
Generally between July and September after the financial year ends.

3. Is PF interest calculated monthly or yearly?
It accrues monthly but is credited once annually.

4. Is PF interest taxable?
Yes, if employee contributions exceed ₹2.5 lakh in a year (₹5 lakh where no employer contribution is made).

5. Why is my PF interest not visible yet?
It may be due to EPFO’s batch processing, late employer payments, or passbook update delays.

6. How can I check PF balance and interest?
Via the EPFO online passbook, UMANG app, or SMS/missed call services.

Conclusion

The PF interest rate for FY 2024–25 is 8.25%, making EPF one of the most rewarding and secure fixed-return investments in India. Though interest crediting may take a few months, the returns are guaranteed.

By keeping your UAN active, completing KYC, and avoiding frequent withdrawals, you can maximize your PF benefits and steadily build a strong retirement corpus.

Thank You.