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 Voluntary Provident Fund

Q1. Is VPF interest always the same as EPF?
Yes, VPF interest mirrors the EPF rate each financial year.

Q2. What is the VPF rate for FY 2025–26?
8.25% per annum. employer.

Q3. Has the VPF rate changed recently?
Increased from 8.15% in FY 2023–24 to 8.25% in FY 2024–25 and remains for FY 2025–26.

4. How is VPF interest calculated?
Monthly on the opening balance, paid annually.

Q5. Are VPF returns taxable?
No, provided total EPF+VPF annual contributions don’t exceed ₹2.5 lakh.

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