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VPF Interest Rate: What You Need to Know (FY 2025–26)

VPF Interest Rate: What You Need to Know (FY 2025–26)

The Voluntary Provident Fund (VPF) allows salaried employees to voluntarily contribute more than the mandatory 12% of their basic salary (plus DA) into their EPFaccount. One of the key attractions of VPF is the interest rate—it matches the high EPF interest rate, offering a secure and high-return savings avenue.

Current VPF Interest Rate in FY 2025–26

• The interest rate for VPF in FY 2025–26 is 8.25% per annum, matching the rate applied to EPF accounts.
• This rate remains consistent with FY 2024–25, offering stability for savers.

How VPF Interest Is Calculated

• VPF contributions are merged with EPF, and interest is calculated on the combined monthly opening balance.
• Formula:
  Monthly Interest = Opening Balance × (8.25% ÷ 12)
  The total interest is credited annually at the end of the financial year.

Historical VPF Interest Trends

The shift from 8.15% to 8.25% reflects EPFO's efforts to keep returns competitive.

Why This Matters for You

1.     Higher Returns – VPF delivers returns comparable to EPF and generally outpaces other safe instruments like PPFvs VPF 

2.     Tax Benefits – Contributions qualify under Section 80C, and interest earned is tax-free (subject to PF total contributions not exceeding ₹2.5 lakh per year).

3.     Secure Investment – Funds are government-backed, ensuring absolute safety.

4.     Easy to Manage – Simply request HR to increase your VPF — no separate account needed.

FAQs on VPF Interest Rate

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