EPFO to Finalize Interest Rate on EPF Deposits for FY26

The Employees’ Provident Fund Organisation (EPFO) is holding a crucial meeting on March 2 to finalize the interest rate on Employees’ Provident Fund (EPF) deposits for the financial year 2025-26 (FY26). The Central Board of Trustees (CBT), EPFO’s highest decision-making body comprising government nominees, employer representatives, and trade union members, determines the rate based on the returns generated by EPFO’s investments. The expectations are high that the EPFO may retain the interest rate at 8.25% for the third consecutive year. Political considerations are also at play. With assembly elections looming in states namely West Bengal, Tamil Nadu, Assam, Kerala, and the UT of Puducherry, the government may prioritise avoiding any reduction that could affect salaried employees’ sentiment. According to reports, the EPFO manages a massive corpus of Rs 25-26 lakh crore. The EPF remains a cornerstone of retirement planning, offering tax-free, guaranteed returns that often surpass bank fixed deposits and small savings schemes. The previous meeting of the EPFO held in October and a number of decisions were taken during the meeting, including simplification and liberalisation of the EPF partial withdrawal provisions. “To enhance ease of living for EPF members, CBT decided to simplify the partial withdrawal provisions of the EPF scheme by merging 13 complex provisions into a single, streamlined rule categorised into three types, namely, Essential Needs (illness, education, marriage), Housing Needs, and Special Circumstances,” the Ministry of Labour and Employment had said. Withdrawal limits were also liberalised. Education withdrawals allowed up to 10 times and marriage up to five times (from the existing limit of a total of three partial withdrawals for marriage and education in all), the ministry had said. The requirement of minimum service has been uniformly reduced to only 12 months for all partial withdrawals, the ministry had said.