EPF Interest Rate Calculator: EPFO has recommended 8.25 percent interest rate on EPF for the financial year 2024-25.
EPF Interest Rate Calculator: The Employees’ Provident Fund Organization (EPFO) has recommended 8.25 percent interest rate on Employees’ Provident Fund (EPF) for the financial year 2024-25, which is the same as the previous financial year 2023-24. After this decision, EPFO said in a statement that the interest rate will be officially notified by the Government of India after the recommendation of the Central Board of Trustees, after which EPFO will deposit interest money in the accounts.
Very few people know how interest is calculated on EPF. This is similar to the way PPF interest is calculated and deposited in the PPF accounts of the subscribers. Under Para 60 of the EPF Scheme, 1952, interest is calculated on the amount deposited in the account at the end of every month. However, the interest is deposited at the end of the financial year.
EPFO often announces the interest rate for EPF in the last month of the financial year, but it takes time for the interest to be deposited in the account, as the proposal is sent by the Ministry of Labor to the Ministry of Finance. After the approval of the Finance Ministry, it is notified. After this, the process of depositing interest in the accounts of EPF members starts.
Calculation of interest on EPF deposits
If the amount deposited in your EPF account as on April 1, 2024 is Rs 2 lakh. The basic salary for the financial year 2024-25 is Rs 40,000 per month. As per EPF rules, 12 percent of the basic salary of the employees is deposited in the EPF account. The same amount is also deposited in your account by the employer (company). However, out of the 12 percent contribution of the employer, 8.67 percent is deposited in the Employees’ Pension Scheme (EPS) account at Rs 1,250 per month. The remaining amount is deposited in the EPF account.
Understand with an example
On a basic salary of Rs 40,000, at the rate of 12 percent, the employee’s monthly contribution will be Rs 4,800 and the company’s contribution will be Rs 3,550. In this way, a total of Rs 8,350 will be deposited in your PF account every month.
Now at the end of April 2024, the total deposit amount in your account will be Rs 2,08,350 (2 lakh + 8,350). The interest on this will be Rs 1432.41 for the month of April at the rate of 8.25 percent.
In May 2024, the total deposit amount in the account will be Rs 2,16,700 (2,08,350 + 8,350). On this amount, interest of Rs 1489.81 will be available in the month of May at the rate of 8.25 percent.
- Rs 1547.22 in June 2024
- Rs 1604.63 in July 2024
- Rs 1662.03 in August 2024
- Rs 1719.44 in September 2024
- Rs 1776.84 in October 2024
- Rs 1834.25 in November 2024
- Rs 1891.66 in December 2024
- Rs 1949.06 in January 2025
- Rs 2006.47 in February 2025
And, the total deposit amount will be Rs 300200 in March 2025. You will get interest of Rs 2063.88 on this.
In this way, a total interest of Rs 20,977.69 will be deposited in your EPF account for 12 months.
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