EPF Interest Rate

The EPF interest rate for the current year is set at 8.25%, as confirmed by the Employees' Provident Fund Organisation.
OPEN FD
EPF Interest Rate
OPEN FD
4 mins
14 November 2024

The Employees' Provident Fund (EPF) is a retirement benefits scheme established under the Employees' Provident Funds and Miscellaneous Provisions Act, 1952. It requires both employers and employees to contribute a portion of the employee's salary to the fund each month.

The Employees' Provident Fund Organisation (EPFO) manages the EPF scheme. It applies to businesses with 20 or more employees, and certain establishments may be covered even if they have fewer than 20 employees.

The interest rate for EPF contributions made between 1 April 2023 and 31 March 2024 is fixed at 8.25% per annum.

Current & Historical EPF Interest Rates

Every year, the EPF interest rate is reviewed by the Employees' Provident Fund Organization (EPFO) Central Board of Trustees in consultation with the Ministry of Finance. Interest rate for the year 2024 is fixed at 8.25%. Employee Provident Fund interest rate for the last 5 year are mentioned below:

Fixed Deposit

  1. Trusted by over 5 lakh customers
  2. Fixed Deposits worth more than Rs. 50,000 crore booked
  3. Rated CRISIL AAA/STABLE and [ICRA]AAA(STABLE)
  4. Special tenure of 18, 22, 33, 42 and 44 months offered for higher returns
  5. Up to 0.40% p.a. extra interest offered for senior citizens
  6. Flexible interest payout options available - Monthly, Quarterly, Half-yearly, Annually or at Maturity

By proceeding, you agree to our Terms and Conditions

Financial Year

Interest Rate

2016-17

8.65%

2017-18

8.55%

2018-19

8.65%

2019-20

8.50%

2020-21

8.50%

2021-22

8.10%

2022-23

8.15%
2023-24 8.25%

Pro tip

Bajaj Finance launches a new variant, "FD Max", for investments upto Rs. 25,000 . Bajaj Finance is providing one of the highest interest rates of up to 8.85% p.a.for senior citizens and 8.60% p.a. for non-senior citizens , in this variant.

systematic-deposit-plan-pro-tip-banner

EPF Interest Rate 2024

The PF interest rate are reviewed every year. For the financial year 2024, it is fixed at 8.25%. After the EPFO declares the interest rate for a fiscal year and the year concludes, the rate is calculated based on monthly closing balance and then for the entire year.

The newly published interest rates remain applicable for the upcoming fiscal year, starting from April 1st of one year and ending on March 31st of the following year.

Here are key points to remember about the EPF Interest Rate:

  • The interest rate of 8.25% is now in effect and applies to EPF deposits.
  • While interest is computed monthly, it is credited to the Employees’ Provident Fund account only once a year on March 31st of the respective fiscal year.
  • The interest accrued is added to the balance for the following month, i.e., April's balance, and is factored into the interest calculation.
  • If no contributions are made to an EPF account for 36 consecutive months, the account becomes dormant or inoperative.
  • Employees who have not reached retirement age may still earn interest on their inactive accounts.
  • Inactive accounts of retired employees do not accrue interest.
  • Interest earned on dormant accounts is taxed at the member's income tax slab rate.
  • Employees do not receive interest on contributions made to the Employees’ Pension Scheme. However, after the age of 58, a pension is provided from this amount.

Fixed deposit variants

Highest Credit Ratings | Trusted with over 1.4 million Deposits | Assured Returns on FD
New Product

FD Max

INTEREST RATES UP TO
8.85% p.a.
Invest Online

Digital FD Only on App/Web

INTEREST RATES UP TO
8.85% p.a.
Invest Online

42 months

INTEREST RATES UP TO
8.85% p.a.
Open FD

FD - Age below 60

INTEREST RATES UP TO
8.60% p.a.
Open FD

FD - Senior Citizen

INTEREST RATES UP TO
8.85% p.a.
Open FD

FD – Special Tenure

INTEREST RATES UP TO
8.85% p.a.
Open FD

EPF Contribution by Employee and Employer

Before you calculate the interest on your EPF account, you must understand how contributions to you EPF account balance are made. First, there is the employee contribution which may either be 12%, 10% or 8% (in the case of women employees) of basic pay plus dearness allowance for the first 3 years of employment. The employer EPF contribution will match that at 12% or 10%. An employer is eligible to pay 10% if the company in question has fewer than 20 employees, has sick units, or meets certain specific conditions that are specified by the EPFO.

Also read: PF withdrawal rules

Understanding the wage ceiling

If your income exceeds Rs. 15,000, your employer is free to make contributions based on one of three methods:

  • Your employer may choose to restrict both your contributions to Rs. 15,000 per annum.
  • Your employer may choose to continue to match your contribution even over the wage ceiling.
  • Your employer may allow you to contribute 12% of your basic pay plus dearness allowance while they restrict their share of the contribution to the celling of Rs. 15,000.

Details Required to Calculate EPF Interest Rate

  • Employee's current age
  • Retirement age
  • Percentage of contribution to EPF
  • Monthly basic salary and dearness allowance
  • Current EPF balance

How to Calculate PF Interest

The interest on your PF balance is computed monthly but only credited to your account at the end of the financial year, specifically on March 31 each year. To calculate the interest on your EPF, you employ the step method: multiply your closing balance at the end of the month by the current PF interest rate and divide by 12.

For example, the rate for the 2016 financial year was 8.8%, the interest rate for 2017 was 8.65% and the rate for the 2018 financial year was 8.55%.

If we assume the rate of interest for EPF to be 8.65% and your basic salary plus dearness allowance to be Rs. 50,000. You as an employee will contribute 12% of the total amount, which equals Rs. 6,000.

Let’s say your employer chooses to contribute 12% of your basic salary, minus 8.33% of Rs. 15,000 towards the EPS (Rs. 6,000 – Rs. 1,259.50).
This amounts to Rs. 4,750, when rounded off.

The opening balance in your account will be Rs. 10,750.

Step method

The interest accrued in the first month is zero, as the opening balance is zero. In the second month, the interest will be calculated on the opening balance of Rs. 10,750.

Assuming the interest rate is 8.65% per annum, your monthly interest will be

8.65% / 12 = 0.72%

Therefore, your monthly interest will be 0.72%*10,750 = Rs. 77.4, which will be rounded off to Rs. 77.

Formula method

If the EPF balance is Rs. 10,750, and the rate of interest is 8.65%, you can calculate interest according to this formula:

(8.65% / 12)*10,750 = Rs. 77.4 = Rs. 77

The closing balance for the year, which will go on to be the opening balance for the next year, will consist of the balance at the end of 12 months plus the total interest accrued in that year.

You can also use online calculators like this one to calculate your EPF.

EPF Interest Rate for Inactive Accounts

When an Employee Provident Fund account remains inactive for 36 months due to no contributions, it becomes dormant. This often occurs when an employee forgets to transfer the account from the previous employer to the new one.

From 2016, your dormant Employee Provident Fund account will also accumulate interest based on the prevailing rates.

Also read: What is EPF Form 31

Withdrawals from EPF

You will be eligible to withdraw the full amount of your EPF only when you reach 58 years of age, or when you have been unemployed for more than two months. You may be able to make withdrawals before time under specific circumstances such as:

  • If you are using the money to cover medical expenses or pay off a home loan
  • If you have been unemployed for more than 60 days or are intending to move abroad permanently

If you are 57 years old, you are eligible to make a withdrawal of up to 90% of the total amount, without any restrictions. All withdrawals made after 5 years are exempt from tax. If you make a withdrawal within 5 years; however, you will be required to pay income tax on that amount.

Conclusion

In conclusion, calculating the interest on your EPF balance is a straightforward process that allows you to monitor the growth of your savings effectively. By following the steps outlined in this article, you can easily estimate the interest you'll earn on your EPF balance, ensuring that you are well-prepared for retirement and any financial goals you have in mind. So, start crunching those numbers and take charge of your financial well-being.

Calculate your expected investment returns with the help of our investment calculators

Investment Calculator

FD Interest Calculator

SSY Calculator

PPF Calculator

Recurring Deposit Calculator

Provident Fund Calculator

Gratuity Calculator

Frequently asked questions

Will an individual get interest on PF after retirement?

You will receive EPF interest for a maximum of 3 years post-retirement. Once there's no contribution for 3 years, the EPF account becomes inactive, and you will not earn interest.

Can I withdraw my EPF funds when I am unemployed?

Yes, you can withdraw EPF funds when you are unemployed for more than two months.

What are the Withdrawal permissions from EPF amount including epf interest under the rule?

Under usual circumstances, an employee can claim the principal amount along with accrued interest upon retirement. Nevertheless, individuals aged 54 or older have the option to withdraw up to 90% of the accumulated balance. Additionally, if an individual remains unemployed for a period exceeding 60 days, they are eligible to withdraw the entire accumulated balance at that time.

What is a Universal Account Number (UAN)?

A Universal Account Number (UAN) is a unique identifier provided to EPF members, helping them manage their provident fund accounts efficiently.

Can you avail advances against your EPF balance?

Contributions to the scheme are designed to address post-retirement needs, yet individuals need not wait until retirement to access financial assistance for specific obligations. These advances are permissible under specific circumstances, such as purchasing a home, repaying a home loan, funding education or weddings, etc. Unlike loans, there is no obligation to repay the advances obtained.

What are the Income tax exemptions on EPF?

Contributions, accrued interest, and withdrawals fall under the income tax exemption: EEE model. Contributions of up to Rs. 1,50,000 are eligible for deduction under Section 80C of the Income Tax Act.

What are the Contribution limits to Voluntary Provident Fund Scheme?

The contribution limits to the Voluntary Provident Fund Scheme mirror those of the Employee Provident Fund (EPF), where an employee can voluntarily contribute up to 100% of their basic salary and dearness allowance.

Is EPFO interest credited for 2024?

All active EPF members will receive the credited interest, as recommended by the Central Board of Trustees in February 2024 and later approved by the Finance Ministry in May of the same year.

Does PF interest stop after 3 years?

There is no time limit on EPF membership. Even after leaving an organization, a person can remain a member. However, if no contributions are made to the PF account for three consecutive years, the account will stop earning interest after this period.

Show More Show Less

Videos on Fixed Deposit

Bajaj Finserv app for all your financial needs and goals

Trusted by 50 million+ customers in India, Bajaj Finserv App is a one-stop solution for all your financial needs and goals.

You can use the Bajaj Finserv App to:

  • Apply for loans online, such as Instant Personal Loan, Home Loan, Business Loan, Gold Loan, and more.
  • Invest in fixed deposits and mutual funds on the app.
  • Choose from multiple insurance for your health, motor and even pocket insurance, from various insurance providers.
  • Pay and manage your bills and recharges using the BBPS platform. Use Bajaj Pay and Bajaj Wallet for quick and simple money transfers and transactions.
  • Apply for Insta EMI Card and get a pre-approved limit on the app. Explore over 1 million products on the app that can be purchased from a partner store on Easy EMIs.
  • Shop from over 100+ brand partners that offer a diverse range of products and services.
  • Use specialised tools like EMI calculators, SIP Calculators
  • Check your credit score, download loan statements and even get quick customer support—all on the app.

Download the Bajaj Finserv App today and experience the convenience of managing your finances on one app.

Do more with the Bajaj Finserv App!

UPI, Wallet, Loans, Investments, Cards, Shopping and more

GET THE APP

Disclaimer

As regards deposit taking activity of Bajaj Finance Ltd (BFL), the viewers may refer to the advertisement in the Indian Express (Mumbai Edition) and Loksatta (Pune Edition) furnished in the application form for soliciting public deposits or refer https://www.bajajfinserv.in/fixed-deposit-archives
The company is having a valid Certificate of Registration dated March 5, 1998 issued by the Reserve Bank of India under section 45 IA of the Reserve Bank of India Act, 1934. However, the RBI does not accept any responsibility or guarantee about the present position as to the financial soundness of the company or for the correctness of any of the statements or representations made or opinions expressed by the company and for repayment of deposits/discharge of the liabilities by the company.

For the FD calculator the actual returns may vary slightly if the Fixed Deposit tenure includes a leap year.