The Employees Provident Fund (EPF) is a key retirement benefits scheme under the Employees Provident Fund and Miscellaneous Act, 1952. Employees and employers contribute monthly creating a significant retirement corpus. The scheme, overseen by the Employee Provident Fund Organization (EPFO), offers a lump sum at retirement inclusive of both contributions and interest.

EPF Interest Rate Update

For the fiscal year 2022-23, the EPFO announced an 8.15% interest rate on EPF accounts, as per a circular dated July 24, 2023, ensuring competitive interest rates.

EPF Interest Rates Over the Years

The EPF interest rate is annually reviewed by the EPFO's Central Board of Trustees alongside the Ministry of Finance. Here are the rates for recent years:

• 2016-17: 8.65%
• 2017-18: 8.55%
• 2018-19: 8.65%
• 2019-20: 8.65%
• 2020-21: 8.55%
• 2021-22: 8.55%
• 2022-23: 8.15%

Essential Points on EPF Interest Rate

• The current rate at 8.15% applies to all EPF deposits.
• Interest is calculated monthly but credited annually at fiscal year's end.
• Dormant accounts, or those inactive for 36 months, don't receive interest unless certain conditions are met.
• Interest on dormant accounts incurs tax based on the member’s slab rate.
• After age 58, no interest is paid on retired employees' inactive accounts; instead, a pension is provided.

EPF Contributions from Employees and Employers

Both employee and employer contribute 12% of the basic salary plus dearness allowance. The employer's portion divides into 8.33% towards the Employee Pension Scheme (EPS) and 3.67% to the employee's EPF. Employers also contribute 0.50% towards the Employees’ Deposit Linked Insurance (EDLI).

Procedure for Calculating EPF Interest

Interest is monthly calculated but yearly deposited. For example, an employee with a ₹30,000 basic salary and dearness allowance contributes ₹5,950 monthly to EPF. With an 8.15% interest rate, May's interest would be ₹84.29, illustrating essential growth for retirement planning.

Conclusively, the EPF interest rate is integral to the scheme. Awareness of the rates, contributions, and calculations is crucial for employees and employers. The EPFO's transparency and competitive rates augment its appeal as a retirement plan.