This week holds significance for around 7 crore account holders of the Employee Provident Fund Organization (EPFO), which manages a key social security scheme.
The Central Board of Trustees (CBT) of EPFO is set to meet on Friday, 28 February 2025, to decide the interest rate on the Employee Provident Fund (EPF) for the financial year 2024-25.
Last year (2023-24), EPF account holders received an 8.25% interest rate, which was slightly higher than 8.15% in 2022-23 and 8.10% in 2021-22.
Given the strong performance of EPFO’s investments, the interest rate for 2024-25 is likely to remain at 8.25%.
How EPFO Works & A New Proposed Fund
EPFO is India’s largest social security scheme for private sector employees. Each month, a portion of an employee’s salary is deducted for the Provident Fund (PF), and the employer contributes an equal amount.
Employees can withdraw their PF savings in situations like job loss, home purchase or construction, marriage, children’s education, or retirement.
In the upcoming meeting, CBT may also discuss a new Interest Stabilization Reserve Fund.
This proposed fund aims to provide stable returns to account holders even when interest rates fluctuate or investment earnings decline. If approved, it could be introduced by 2026-27.
The Central Board of Trustees includes Labor and Employment Minister Mansukh Mandaviya, along with trade union representatives.
Once a decision is made, the Finance Ministry must approve it before finalization.
