EPF (Employee Provident Fund): The Retirement Savings You Might Be Ignoring

For most salaried employees in India, the Employee Provident Fund (EPF) is the single largest forced savings mechanism – and most people have little idea how much it’s actually accumulating or how to optimize it.

How EPF Works

Both you and your employer contribute 12% of your basic salary + dearness allowance to the EPF trust monthly. However, your employer’s 12% is split: 8.33% goes to the Employees’ Pension Scheme (EPS) and only 3.67% goes to EPF. Your full 12% goes entirely into EPF.

EPF Interest Rate

The EPF interest rate for FY 2024-25 was 8.25%, declared by the EPFO board and approved by the Ministry of Finance. This is tax-free interest, making EPF’s actual yield significantly higher than comparable taxable instruments. It is currently the highest guaranteed, tax-free return on a large-scale savings instrument in India.

Voluntary Provident Fund (VPF)

Beyond the mandatory 12%, you can voluntarily contribute up to 100% of your basic salary to EPF through VPF. The VPF earns the same EPF interest rate and enjoys the same EEE tax status. For high-income employees in the 30% bracket, VPF is one of the best risk-free investment options available.

How to Check Your EPF Balance

• Visit epfindia.gov.in and use the “Know Your Balance” portal.
• Download the UMANG app and access EPF services.
• Give a missed call to 011-22901406 from your Aadhaar-linked mobile number.
• SMS “EPFOHO UAN ENG” to 7738299899 from your registered mobile.