EPF Interest Rate: How To Calculate Interest On Your EPF Account – News18

The Employees’ Provident Fund (EPF) is a retirement financial savings scheme supported by the Central authorities, accessible to all salaried workers and personal sector staff. Each month, an worker contributes 12 % of their primary wage and dearness allowance in the direction of EPF financial savings, with the employer matching this contribution.

The Employees’ Provident Fund (EPF) rate of interest is said yearly by the Employees’ Provident Fund Organisation (EPFO). For the monetary yr 2023-24, the EPF rate of interest is 8.25%.

EPF serves as a financial savings scheme for workers employed by organizations falling underneath the purview of the Employees’ Provident Fund Organisation (EPFO).

In accordance with the EPF scheme, each the worker and the employer are required to make equal contributions to the scheme.

Upon retirement, the worker receives a lump sum fee comprising their very own contributions, the employer’s contributions, and accrued curiosity on each quantities.

Here’s how the EPF curiosity is calculated:

• The curiosity is compounded month-to-month. This means the curiosity earned in a selected month is added to the principal quantity, and the curiosity for the following month is calculated on this increased quantity.
• However, the curiosity is credited to your EPF account solely every year, on March thirty first of the monetary yr.

Here’s a simplified option to perceive the calculation (assuming month-to-month contributions):

• Divide the annual rate of interest (8.25%) by 12 to get the month-to-month rate of interest. (This is roughly 0.67%)
• Each month, add your month-to-month contribution to the earlier month’s closing steadiness.
• Multiply the brand new steadiness by the month-to-month rate of interest to calculate the curiosity earned for that month.
• Add the curiosity earned to the brand new steadiness to get the closing steadiness for the month.

For instance, let’s say the preliminary contribution for the primary month is Rs 10,000, with no curiosity accrued. In the next month, the opening steadiness doubles as a consequence of a contemporary contribution. Therefore, the calculation considers Rs 20,000. The accrued curiosity could be Rs 137.5 (20000 x 8.25 %)/12, rounded off to Rs 137. This course of repeats for every subsequent month, with the ultimate annual curiosity quantity obtained by summing all month-to-month balances on the finish of the yr.

While this strategy offers you a common concept, the precise calculation may contain some variations.

For a extra exact calculation, you need to use the EPFO’s on-line companies or check with a monetary advisor.

Here are some further factors to recollect:

The EPF rate of interest is topic to alter yearly.

You can entry your EPF account particulars and curiosity earned by way of the EPFO’s on-line portal.

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