Employee Provident Fund is a retirement scheme available to all salaried individuals. In this scheme, the employer contributes 12% on the basic pay of the individuals with a salary of up to Rs. 15,000. If the salary is higher, the employer contribution may vary according to certain criteria. Here’s a quick guide to walk you through the EPF scheme and how to calculate the interest accrued on your EPF balance.
Current & Historical EPF Interest Rates
Every year, the EPF interest rate is reviewed by the EPFO's 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:
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% |
EPF Interest Rate 2024
The EPF 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.