EPFO may keep PF interest rate at 8.25% for FY26. What it means for your savings
India Today
The EPFO is also working on creating an interest stabilisation reserve fund. The aim is to provide a stable and consistent interest rate to subscribers, even if markets are volatile.
The Employees’ Provident Fund Organisation is likely to retain the EPF interest rate at 8.25% for FY26. A final decision is expected at the upcoming meeting of its decision-making body on March 2, reported Business Today.
If approved, this would be the third consecutive year that subscribers receive 8.25% on their provident fund deposits.
As per the report EPFO would have adequate surplus from its investments to maintain the 8.25% interest rate this fiscal. However, they also said that in the coming years the body may need to explore newer investment avenues or may have to consider lower returns from the next fiscal if earnings come under pressure.
The EPFO manages a corpus of a little over Rs 28 lakh crore. It invests 45 to 65% of fresh inflows in government securities. Around 20 to 45% goes into other debt instruments. Between 5 and 15% is invested in equities through exchange-traded funds. Up to 5% is parked in short-term debt instruments.
This mix of investments helps EPFO balance safety and returns, as most of the funds are placed in relatively stable debt instruments.
The EPFO is also working on creating an interest stabilisation reserve fund. The aim is to provide a stable and consistent interest rate to subscribers, even if markets are volatile. Such a reserve can help smooth returns in years when investment income is lower.
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