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EPF Interest Rate for FY 2025–26: When Will PF Interest Be Credited and How Is It Calculated?

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Indiaemploymentnews
Thu Mar 12 20:43:19 IST 2026
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Millions of salaried employees in India are waiting to know when the interest on their Provident Fund (PF) deposits will be credited. The Employees' Provident Fund Organisation (EPFO) has already announced an 8.25% interest rate for EPF deposits for the financial year 2025–26, but many members are still unsure about when the interest will reflect in their accounts and how the calculation is done.

Here’s a detailed explanation of when EPF interest is credited, the approval process, and the formula used to calculate the interest amount

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EPF Interest Rate for FY 2025–26

The decision regarding the EPF interest rate is taken by the Central Board of Trustees, the apex decision-making body of EPFO.

For the financial year 2025–26, the board has recommended an 8.25% interest rate on EPF deposits. However, this interest rate becomes effective only after receiving final approval from the Government of India

.

When Will EPF Interest Be Credited to PF Accounts?

There is no fixed date for transferring EPF interest into members’ accounts. The process typically involves three important stages:

  • Interest Rate Decision
    The EPFO’s Central Board of Trustees decides the EPF interest rate for the financial year.

  • Government Approval
    The recommendation is sent to the central government for approval.

  • Interest Credit to Accounts
    After approval, EPFO credits the interest to members’ PF accounts.

    • Currently, only the first stage—interest rate announcement—has been completed.

    Based on previous years’ timelines, the government’s final approval may take two to three months. Once approved, EPFO begins crediting interest to accounts in phases.

    For example:

    • In 2025, approval for EPF interest transfer was granted on May 22, and the full process was completed around July

    .

  • For FY 2023–24, interest crediting began in August and continued until December.

    • It’s important to note that interest is not credited to all accounts simultaneously. The process happens gradually across different accounts.

    How EPF Interest Is Calculated

    The calculation of EPF interest follows Rule 60 of the EPF Scheme, 1952.

    Under this rule, EPF interest is calculated based on the monthly running balance in a member’s PF account

    , and the final interest amount is credited at the end of the financial year.

    Several rules determine how interest is calculated.

    Rule 1: Interest on Previous Year’s Balance

    The balance available in your EPF account on the last day of the previous financial year (March 31) earns interest for the entire next financial year.

    However, if you withdraw money during the year, the withdrawn amount is excluded from interest calculation.

    Example

    • Balance on 31 March 2025: ₹5,00,000

    • Withdrawal during FY 2025–26: ₹1,00,000

    Interest will be calculated on ₹4,00,000.

    Calculation

    ₹4,00,000 × 8.25% = ₹33,000 interest for the year

    Rule 2: Interest on Withdrawn Amount

    If you withdraw money during the financial year, interest on that amount is calculated only until the month preceding the withdrawal.

    Example

    If ₹1,00,000 is withdrawn on 20 November 2025, interest will be calculated from 1 April 2025 to 31 October 2025

    (7 months).

    Calculation

    ₹1,00,000 × 8.25% × 7/12 = ₹4,812.50

    Rule 3: Interest on New Contributions

    If new contributions are deposited in your PF account during the year, interest on those deposits starts from the first day of the next month after the deposit and continues until March 31.

    Example

    If an employer deposits ₹20,000 on April 10, 2025, interest will be calculated from 1 May 2025 to 31 March 2026

    (11 months).

    Calculation

    ₹20,000 × 8.25% × 11/12 = ₹1,512.50

    This method is applied to each new contribution deposited during the financial year.

    Rule 4: Interest Is Rounded Off

    After calculating the total interest earned during the financial year, the final amount is rounded off to the nearest rupee.

    For example:

    • Calculated interest: ₹69,399.50

    • Final credited amount: ₹69,400

    What EPF Members Should Know

    EPF remains one of the most popular long-term retirement savings schemes in India, especially for salaried employees. With an interest rate of 8.25% for FY 2025–26, it continues to offer stable returns compared to many other fixed-income options.

    Although the interest may take a few months to reflect in accounts, members do not lose their earnings—the interest is calculated for the entire financial year regardless of when it is credited.

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