The FY27 Rate
The EPFO central board of trustees announced an 8.25% interest rate on EPF contributions for FY27 — matching the FY26 rate. The announcement follows EPFO's investment returns from its equity (ETF) and debt portfolio mix.
How It Compares
At 8.25% tax-free (for contributions meeting the threshold), EPF remains one of the best risk-free return instruments available to salaried employees. Bank FDs are currently at 7–7.5% taxable. PPF is at 7.1% tax-free. EPF wins on a post-tax basis for those in the 20% and 30% tax brackets.
VPF Worth Considering?
Voluntary Provident Fund (VPF) allows you to contribute more than the mandatory 12% of basic salary, at the same 8.25% tax-free rate. The limit is 100% of basic salary. If you have surplus savings and don't need liquidity, VPF is a compelling fixed-income alternative — just remember it has the same 5-year lock-in tax benefit condition as EPF.