Millions of salaried employees across the country may continue to earn 8.25 per cent interest on their provident fund deposits in the financial year 2025–26 (FY26). According to sources, the Employees’ Provident Fund Organisation (EPFO) is planning to keep the interest rate unchanged for now. The final decision is expected to be taken at a meeting scheduled for March 2. If approved, this will mark the third consecutive year that EPF subscribers receive an 8.25 per cent return. The move is significant for over 6 crore account holders, as stable returns make retirement planning more predictable.
Why EPFO may retain 8.25 per cent
Reports suggest that EPFO has sufficient investment surplus in the current financial year to maintain the 8.25 per cent interest rate.
The proposal will be placed before the Central Board of Trustees (CBT), the apex decision-making body of EPFO, which functions under the chairmanship of the Union Minister of Labour and Employment.
If cleared on March 2, the interest for FY26 will be credited to subscribers’ accounts in due course.
How EPFO invests its corpus
EPFO manages a total corpus exceeding Rs 28 lakh crore. The funds are invested across multiple instruments to balance safety and returns:
- 45 per cent to 65 per cent in government securities
- 20 per cent to 45 per cent in other debt instruments
- 5 per cent to 15 per cent in equities through ETFs
Up to 5 per cent in short-term debt
This diversified approach is aimed at ensuring stability while generating steady returns for subscribers.
Will the PF interest rate fall in the future?
While the 8.25 per cent rate is likely to continue for FY26, there could be pressure in the coming years if investment income declines.
To address potential volatility, EPFO is working on creating an “Interest Stabilisation Reserve Fund” to help maintain stable returns despite market fluctuations.
How much interest will you earn on Rs 5 lakh?
If you have Rs 5 lakh in your EPF account, at an interest rate of 8.25 per cent, you can earn approximately Rs 41,250 annually, depending on your monthly balance and additional contributions.
Over time, this interest significantly strengthens your retirement corpus.
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