New Delhi [India]: The Central Board of Trustees (CBT) has recommended an 8.25% annual interest rate on Employees’ Provident Fund (EPF) accumulations for the financial year 2024-25. The Government of India will officially notify the rate, following which the Employees’ Provident Fund Organisation (EPFO) will credit the interest into subscribers’ accounts.
Key Decisions from the 237th CBT Meeting
Union Minister Mansukh Mandaviya chaired the 237th meeting of the CBT, EPF, in New Delhi on Friday. The board made several key decisions, particularly regarding enhanced insurance benefits under the Employees’ Deposit Linked Insurance (EDLI) Scheme to strengthen financial security for EPF members’ families.
Enhanced EDLI Benefits: Key Reforms
- Minimum Life Insurance Benefit of ₹50,000:
- If an EPF member passes away without completing one year of continuous service, their family will now receive a minimum insurance benefit of ₹50,000.
- This change is expected to benefit over 5,000 cases of deaths in service every year.
- EDLI Benefits for Deaths Within Six Months of Last Contribution:
- Previously, EDLI benefits were denied if a member’s death was considered “away from service.”
- Now, if an EPF member dies within six months of their last contribution (provided their name is still on the employer’s rolls), their family will still be eligible for EDLI benefits.
- This change will positively impact 14,000 families annually.
- Consideration of Employment Gaps for Continuous Service Requirement:
- Earlier, even a one-day gap between jobs could lead to the denial of minimum EDLI benefits (₹2.5 lakh to ₹7 lakh).
- Under the new rule, a gap of up to two months between two jobs will now be considered as continuous service, ensuring eligibility for EDLI benefits.
- More than 1,000 death cases per year will benefit from this modification.
These EDLI enhancements are projected to result in higher benefits for over 20,000 cases of deaths in service annually, improving social security for EPF members’ families and reducing financial hardships.
EPF Remains a Stable and Lucrative Investment
The EPF interest rate of 8.25% continues to make it an attractive and tax-efficient savings option for salaried employees. Given its relatively high and stable returns, EPF remains a preferred long-term investment tool, offering tax-free interest (up to a specified limit) and strong financial security.
With these policy improvements, the CBT and EPFO aim to further enhance financial protection for India’s workforce while ensuring steady growth of retirement savings.