The Employees’ Provident Fund Organization, or better known as EPFO, has officially approved an interest rate of 8.25% on EPF balances for the financial year 2024-25. This is the same rate as for the year gone by; no decrease being implemented is indeed heartening for the subscribers. With the government signing off on the rate, it is only a matter of time before the interest earnings find their way into the accounts of over 7 crore EPFO members.
Who Gains From It: Over 7 Crore EPF Subscribers
The benefit resonates with the more than 70 million account holders with an EPF across India. Whether one has been an EPF contributor for many years or has just joined employment or even sporadically contributed after switching jobs, this rate of interest will most likely hit the balance and account in question.
Interest Stability: What Does That Mean?
Keeping with the rate actually helps in several ways:
- Reasonable expectations in respective long-term savings. Subscribers furthering plans for retirement, for home, or child education have a better chance to decide because this return is foreseeable.
- Providing further respite since many alternate savings/investments offer a low, unjustifiably high offering, and volatility. At least, compared to some fixed-income instruments, interest in EPF at 8.25% looks pretty good.
- This decision had been made during the 237th meeting of the Central Board of Trustees of the EPFO, chaired by the Union Minister of Labour & Employment.
Dates & Disbursement
- The interest rate (8.25%) decision was taken in February 2024.
- Subsequent to government approval, the EPFO shall now credit the interest amount in the subscribers’ account. The period for crediting are expected ASAP, yet the exact date may vary depending on processing times.
Other EPFO Reforms: Auto-Claims, Simplified KYC & Advisories
Apart from the interest-rate mutation, several other member-oriented reforms have been introduced by EPFO such as:
- Advance Withdrawals: For advance claims, auto-settlement has been made operational for cases up to ₹5 lakh, and includes urgent need cases such as illness, housing, and education, among others.
- Less Dependency On Third-Party Agents: The EPFO has cautioned members from resorting to agents for services that are officially free of cost, like KYC update or claim filing, as they might submit sensitive personal and financial information to these agents.
- Simplified Process: Some require no employer approvals anymore (e.g. transfer claims, KYC seeding with UAN) and require fewer documents (e.g. removal of need for cheque-leaf/passbook).
What Members Should Do
- Keep your EPF passbook/UAN account under watch to ensure when they credit your interest at 8.25%.
- Use official portals (EPFO website, UMANG app) for all services, thereby eliminating any necessity of any agents or intermediaries.
- If you have any claims to make (e.g., advance, transfer), check whether these now qualify for auto-settlement and simplified processing.
- Make sure KYC/bank details/etc. are updated so as not to incur delays in the receipt of interest or benefits.
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