Proposal to increase EPF rate sent to Finance Ministry — When can you expect your interest to be credited

EPF contribution is credited to the account on a monthly basis, and interest is computed every month. However, the total interest for the year is credited at the end of the financial year. The EPF interest for FY23 is still awaited.

The EPFO earlier hiked the interest rate by 0.05 percent to 8.15 percent for the financial year 2022-23, from 8.10 percent. This was the first hike since FY19. In March 2022, the government declared an 8.1 percent EPF rate for more than 6 crore active subscribers, which was the lowest since 1977-78.

EPF is a mandatory savings scheme under the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952.

Going by the rule, the interest here is calculated by adding the monthly running balance, multiplying it by the interest rate, and dividing it by 1,200. The EPFO calculates the month-wise closing balance and then the interest for the whole year.

Now, if an employee withdraws a certain sum from the account, then interest from the beginning of the year till the last date of the month preceding the month in which the withdrawal took place is considered. So, the closing balance for the year will be: Opening balance + contributions -withdrawal (if any) + interest.