EPF rate ratified at 8.25% for FY25: Here’s how it boosts your retirement savings

The Centre has officially ratified an 8.25% interest rate on Employees’ Provident Fund (EPF) deposits for 2024-25, locking in stable, high returns for over 7 crore salaried Indians and reinforcing EPF’s role as a core retirement savings tool.

Announced on May 24 and confirmed by an official to PTI, the rate matches last year’s figure and was recommended earlier by the Central Board of Trustees (CBT) of the Employees’ Provident Fund Organisation (EPFO). 

With the Ministry of Finance’s approval, the rate will now be formally notified and credited later this fiscal year.

This is the second straight year that EPF deposits will earn 8.25%, a rate that stands above most fixed-income alternatives like bank deposits or government savings schemes. Last year’s payout was based on a record income of ₹1.07 lakh crore on a corpus of ₹13 lakh crore. In comparison, the 2022-23 rate was 8.15%, supported by ₹91,151 crore on ₹11.02 lakh crore.

The impact is far-reaching. For employees contributing consistently over time, the monthly compounding of interest can significantly boost retirement savings. For instance, on a ₹30,000 monthly salary with standard EPF contributions of ₹5,950 (from both employer and employee), the 8.25% interest greatly accelerates corpus growth over decades.

Beyond high returns, EPF offers tax efficiency. Both contributions and interest earned are tax-free at withdrawal (subject to conditions), making it a rare EEE (Exempt-Exempt-Exempt) instrument under Indian tax law.

Crucially, EPF returns have historically outpaced inflation, preserving purchasing power and delivering real gains. Amid global economic uncertainty, this continuity sends a signal of stability and security to India’s salaried workforce.

The EPFO is also innovating in service delivery. As of March 6, 2025, it had processed a record 2.16 crore claims through its automated system — up from 89.5 lakh the year before — indicating faster access to funds when needed.

Employees can check their EPF balance via the UMANG app, EPFO’s website (epfindia.gov.in), or by giving a missed call to 011-22901406 from their registered number.