BUSINESS
EPFO: Interest will soon be credited to your PF account. How does your PF balance grow each month? Understand with just one click
Interest will be credited to PF accounts soon. For the financial year 2025-26, interest will be credited at a rate of 8.25%. According to Union Labor Minister Mansukh Mandaviya, interest will be credited to all PF members' accounts by July 15th. This update will be reflected in passbooks. But is interest paid monthly or annually? Many employees remain confused about this.
How is EPF interest calculated?
Many employees think that the interest rate is 8.25% per annum. Every month the interest is divided by 12 and added. But this is not the case. EPFO interest is calculated monthly. However, interest is credited to the account only once a year. You are paid interest every month on the balance deposited in the account. The contribution amount is credited to your PF account every month. This increases the total deposited amount. The interest on the amount increases in the second month and is further added in the third month. This is called the power of compounding. This results in a large sum at the time of retirement.
How much interest on a balance of Rs 2 lakh?
Suppose you have ₹2 lakh in your PF account at the beginning of the year, i.e., April 1st. You will earn 8.25% annual interest on this, which means you will earn approximately 0.6875% interest every month. EPFO will first calculate the interest on your ₹2 lakh. The new contribution amount deposited in the month of May will be added to the old balance. Now, the new amount will earn interest at the same rate. This process will continue every month. Your principal amount will continue to grow, and the interest on it will also continue to increase. You will benefit from interest on interest. This amount will be reflected in your passbook at the end of the financial year.
How to check PF balance?
There is an easy way to check whether interest has been credited to your PF account or not, or how much amount is left in your account.
Find out with a missed call: You can check your PF account balance with a missed call. Give a missed call to 011-22901406 from your registered mobile number. The call will disconnect after two rings, and you'll receive an SMS with the balance in your PF account.
Check your balance via SMS: Go to your phone's message box. Type "EPFOHO UAN MAR" and send this message to 7738299899. Use other short forms for other languages. You will receive information about the balance and interest in your PF account.
