The Employees Provident Fund or EPF interest rate for 2022-23 is increased to 8.15%. For FY 2021-22, it was 8.1%. Hence, the increment of 0.05%. Let us look at the past 72 years’ history of EPF interest also.
EPF forms one of the most important parts of anyone’s retirement portfolio. It is also one of the attractive debt instruments as its a fixed, safe, and tax-free returns at retirement. Hence, many try to invest more along with the default option of EPF in the form of VPF.
Before proceeding further, first, let us understand how your EPF contribution is divided. I have written a detailed post in this regard earlier (Employee Provident Fund (EPF)-Changed rules from 1st Sept 2014“. However, I will again show you in detail about your and your employer’s EPF contribution being split.
Note:- Now the EDLI is raised from earlier Rs.3 lakh to Rs.7 Lakh (EDLI Scheme 2021 – EPF Life Insurance of Rs. 7 Lakh).
EPF interest rate 2022-23 – History of EPF rates 1952 to 2023
As I mentioned above, The Employees Provident Fund or EPF interest rate for 2022-23 is increased to 8.15%. For FY 2021-22, it was 8.1%. Hence, the increment of 0.05%.
However, let us look into the past 71 years’ interest rate movement of EPF.
If we look at the historical returns of EPF, in FY 1952-53, it was 3% and gradually increased and during FY 1977-78, it touched the 8% interest rate (which is around the current rate).
From FY 1978-79 to up to 1991-92 it continuously on an uptrend and first 40 years peak was 12%.
From 1992-93 to 1999-00, it was at its peak of 12%. Later on, it is lowering year on year and now it touched to 8.15% for FY 2022-23.
Let me share the historical EPF interest rate from 1952 to 2023.
| Year | EPF Interest Rate |
| 1952-53 | 3.00% |
| 1953-54 | 3.00% |
| 1954-55 | 3.00% |
| 1955-56 | 3.50% |
| 1956-57 | 3.50% |
| 1957-58 | 3.80% |
| 1958-59 | 3.80% |
| 1959-60 | 3.80% |
| 1960-61 | 3.80% |
| 1961-62 | 3.80% |
| 1962-63 | 3.80% |
| 1963-64 | 4.00% |
| 1964-65 | 4.30% |
| 1965-66 | 4.50% |
| 1966-67 | 4.80% |
| 1967-68 | 5.00% |
| 1968-69 | 5.30% |
| 1969-70 | 5.50% |
| 1970-71 | 5.70% |
| 1971-72 | 5.80% |
| 1972-73 | 6.00% |
| 1973-74 | 6.00% |
| 1974-75 | 6.50% |
| 1975-76 | 7.00% |
| 1976-77 | 7.50% |
| 1977-78 | 8.00% |
| 1978-79 | 8.30% |
| 1979-80 | 8.30% |
| 1980-81 | 8.30% |
| 1981-82 | 8.50% |
| 1982-83 | 8.80% |
| 1983-84 | 9.20% |
| 1984-85 | 9.90% |
| 1985-86 | 10.20% |
| 1986-87 | 11.00% |
| 1987-88 | 11.50% |
| 1988-89 | 11.80% |
| 1989-90 | 12.00% |
| 1990-91 | 12.00% |
| 1991-92 | 12.00% |
| 1992-93 | 12.00% |
| 1993-94 | 12.00% |
| 1994-95 | 12.00% |
| 1995-96 | 12.00% |
| 1996-97 | 12.00% |
| 1997-98 | 12.00% |
| 1998-99 | 12.00% |
| 1999-00 | 12.00% |
| 2000-01 | 11.00% |
| 2001-02 | 9.50% |
| 2002-03 | 9.50% |
| 2003-04 | 9.10% |
| 2004-05 | 9.50% |
| 2005-06 | 8.50% |
| 2006-07 | 8.50% |
| 2007-08 | 8.50% |
| 2008-09 | 8.50% |
| 2009-10 | 8.50% |
| 2010-11 | 9.50% |
| 2011-12 | 8.30% |
| 2012-13 | 8.50% |
| 2013-14 | 8.80% |
| 2014-15 | 8.80% |
| 2015-16 | 8.80% |
| 2016-17 | 8.70% |
| 2017-18 | 8.60% |
| 2018-19 | 8.70% |
| 2019-20 | 8.50% |
| 2020-21 | 8.50% |
| 2021-22 | 8.10% |
| 2022-23 | 8.15% |
If we draw the histogram chart of these 71 years’ data, then it looks like the below.
The majority of the time, the interest rate was within the range of 7.8% to 10.2%. Then the next highest was in the range of 3% to 5.4%.
Hence, the current interest rate change from the existing 8.5% to 8.1% is not new. However, yes it obviously hurts many salaried.
Let us check the EPF contribution history also.
If you check out the historical EPF contribution rate, it increased a lot from around 6.25% in 1956 to currently 12% of Basic+DA.
Conclusion – The current 8.15% is still better than any other available debt option. Hence, I strongly advocate EPF and VPF contributions, especially for retirement goal.
