The Ministry of Finance cleared 8.25% EPF interest for FY26, benefiting 7.8 crore subscribers. A UPI withdrawal facility via BHIM app is expected by June 2026.
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The Ministry of Finance has approved an 8.25% interest rate on Employees' Provident Fund deposits for the fiscal year ending March 2026. The rate matches the previous year's payout and covers roughly 7.8 crore subscribers, the Ministry of Labour and Employment said. A formal notification is expected later this month, after which the interest will be credited to accounts, The Indian Express reported.
The retirement fund body, the Employees' Provident Fund Organisation, will absorb a projected loss of ₹944 crore at this rate, according to discussions at the Central Board of Trustees meeting in March. The CBT had recommended keeping the rate unchanged for a third straight year, overruling a sub-committee proposal to cut it to 8.10%.
The government is also rolling out EPFO 2.0 by the end of June 2026. The upgraded digital platform will let members withdraw up to 75% of their corpus directly into bank accounts through UPI and ATM channels. The UPI facility will run on the BHIM application, the Ministry said.
The shift targets blue-collar workers and employees who rely on quick access to savings. The EPFO streamlined withdrawal categories last year into three main buckets, and the new system is meant to simplify the process further.
Subscribers will need to follow the applicable rules when making withdrawals. The EPFO has not yet published the detailed terms for the UPI-based withdrawal mechanism.
The 8.25% rate has been held steady since FY2023-24, even as the sub-committee on investment flagged a lower rate to align with falling yields on government securities. The Finance Ministry cleared the CBT's recommendation without changes.
The formal notification from the Ministry of Labour and Employment will specify the crediting timeline. The Indian Express reported that the interest amount is likely to be deposited after the notification is issued.
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