The VPF interest rate is the EPFO-declared annual rate that applies to Voluntary Provident Fund balances, currently 8.25% for FY 2024-25, identical to the EPF rate.
The VPF interest rate is the annual rate of return that the Employees’ Provident Fund Organisation (EPFO) credits on Voluntary Provident Fund balances. Because VPF rides on the same EPF account, there is no separate VPF rate — the rate that applies to mandatory 12% PF deductions also applies to every additional rupee an employee voluntarily contributes. For FY 2024-25, the Government of India sanctioned a rate of 8.25% per annum, recommended by the EPFO Central Board of Trustees at its 237th meeting on 28 February 2025 and approved by the Ministry of Finance.
The VPF interest rate is the EPFO-declared annual return on provident fund balances, applied identically to mandatory EPF and voluntary VPF contributions. The rate is set each financial year by the EPFO Central Board of Trustees, based on the organisation’s investment income from a portfolio of government securities, state development loans, public sector bonds, and a small permitted allocation to equity through ETFs. The Board’s recommendation is forwarded to the Ministry of Finance, which must concur before the rate is officially notified and credited to member accounts.
For FY 2024-25, the rate is 8.25%. This is unchanged from FY 2023-24 and represents one of the most attractive risk-free returns available to Indian salaried employees on long-tenure savings.
Interest is computed on the monthly running balance at the EPFO-declared annual rate divided by 12. The contribution itself earns interest from the month of credit, and annual interest is the sum of 12 monthly accruals — credited as a single passbook line entry once notified.
Worked example: An employee contributes ₹10,000 per month to VPF (in addition to mandatory EPF) starting April 2024, opening balance zero. Annual contribution = ₹1,20,000. Total interest accrued at 8.25% on monthly running balance ≈ ₹5,373. Closing balance after the March 2025 credit ≈ ₹1,25,373. The interest is credited in a single line entry typically between July and October of the following calendar year.
The Budget 2021 amendment changed the calculus on VPF for high earners. Three rules apply:
EPFO has maintained a separate non-taxable and taxable sub-account from FY 2021-22 onwards to operationalise this split.
| Financial Year | EPFO Declared Rate |
|---|---|
| FY 2024-25 | 8.25% |
| FY 2023-24 | 8.25% |
| FY 2022-23 | 8.15% |
| FY 2021-22 | 8.10% |
| FY 2020-21 | 8.50% |
| FY 2019-20 | 8.50% |
The FY 2021-22 rate of 8.10% was the lowest in approximately four decades, reflecting the broader low-interest-rate environment after the pandemic. The subsequent uptick to 8.25% has been held for three consecutive years.
Omnivoo applies the EPFO-declared rate automatically each year, segregates the post-2021 taxable and non-taxable interest sub-accounts on every member’s annual passbook, and surfaces the projected annual interest as a CTC line during onboarding. The platform validates that combined EPF + VPF contributions remain within the 100% basic+DA ceiling, alerts the employee if their elected percentage will push interest into the taxable zone, and generates compliant ECR files every month so that the EPFO interest credit lands accurately at year-end without employer intervention.
Basic salary is the core fixed component of an Indian salary structure, typically 40-50% of CTC, that determines PF contributions, gratuity, HRA exemption, and other statutory calculations.
EPFO is the statutory body under the Ministry of Labour & Employment that administers India's three Provident Fund schemes — EPF, EPS, and EDLI — covering over 70 million members.
PF is a mandatory retirement savings scheme in India where both employer and employee contribute 12% of basic salary plus dearness allowance each month.
VPF is a voluntary contribution employees can make above the mandatory 12% EPF contribution, earning the same EPF interest rate and qualifying for Section 80C tax benefits.
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