EPF Benefits: If you work in a company, you must have seen EPF or Provident Fund (PF) written in the salary slip. Many people know that this is money deducted from salary, but very few people understand that it is an emergency savings fund created for future financial security. Along with providing financial support after retirement, this money can also be used if needed under certain conditions. Let us know what is EPF, how it works.
EPF (Employees' Provident Fund) is a retirement savings scheme operated by the Employees' Provident Fund Organization (EPFO). The objective of this plan is to create long term savings for the working employees, so that they have financial security after retirement. In simple language, EPF is a piggy bank in which both the employee and the employer together deposit money every month.
Every month, a fixed part of the employee's basic salary and dearness allowance (Basic + Dearness Allowance) is deposited in the EPF account. Additionally, the employer also deposits his share. Interest fixed by EPFO is also available every year on the deposited amount. For example, suppose your basic salary is ₹ 25000. Every month, both employee and employer's share will be deposited in your EPF account. This amount keeps increasing with interest for many years and becomes a big fund by retirement.
1. Saving for retirement: Small monthly savings during job can turn into a big fund over time.
2. Benefit of interest: Interest is available every year on the amount deposited in EPF. With this, your savings not only remain accumulated, but also increase with time.
3. Withdrawal when needed: According to EPFO rules, money can also be withdrawn for buying a house, treatment, education, marriage or in some other circumstances.
4. Financial discipline: Because money is automatically deposited every month, a habit of regular savings is formed.
5. Tax benefits: Under income tax rules, some concessions are also available on investment in EPF and the profits received on it.
Many people consider EPF and PPF to be the same, but both are different schemes.
EPFO fixes the interest rate for every financial year. This rate is applicable after the approval of the Central Government on the recommendation of the Central Board of Trustees (CBT). The interest rate for 2025-26 is 8.25%.
| Year | interest rate |
| 2025-26 | 8.25% |
| 2024-25 | 8.25% |
| 2023-24 | 8.25% |
| 2022-23 | 8.15% |
| 2021-22 | 8.10% |
| 2020-21 | 8.50% |
| 2019-20 | 8.50% |
| 2018-19 | 8.65% |
| 2017-18 | 8.55% |
| 2016-17 | 8.65% |
| 2015-16 | 8.80% |
| 2014-15 | 8.75% |
| 2013-14 | 8.75% |
| 2012-13 | 8.50% |
| 2011-12 | 8.25% |
| 2010-11 | 9.50% |
Suppose total deposit in EPF every month (employee + employer's EPF share) = ₹ 10,000
Period = 20 years
Average interest = 8.25% every year
The tentative total amount will be something like this...
Total Deposit Amount: ₹24,00,000
Estimated interest: Around ₹35–38 lakh
Total EPF corpus: Around ₹59–62 lakh
Note: This is an estimate. The total amount may increase or decrease due to fluctuations in interest. Let us tell you, the entire 12% contribution of the employer does not go to EPF, a part of it goes to EPS (Pension).
(Content Source: EPFO, Ministry of Labor & Employment, Government of India, Income Tax Department, PF Scheme 1952, EPFO Annual Report)
