What is the Voluntary Provident Fund interest rate and how to calculate
Default Image

Indialends, 20 Sep 2025

Share share icon

VPF interest rate

Voluntary Provident Fund is one of the best savings schemes that allow investors to earn guaranteed returns and grow their corpus steadily. The interest rate on VPF hovers around the 8.50% per annum and the returns generated are tax exempt as well. The VPF Interest Rates are revised by the government every year.

Interest for a Voluntary Provident Fund is calculated monthly based on the opening balance of each month. This opening balance includes both EPF and VPF. The balance is credited to an EPF account at the end of a financial year.

Individuals must note that VPF interest for the first month is nil since the opening balance of the first month is zero. To calculate the monthly rate of interest of VPF, it is divided by 1200 and then multiplied by a month’s opening balance.

Let us understand this with the help of an example-

Example: Ranjan joined Company XYZ for a salary of Rs. 30,000 on 1st April 2020. As per the EPFO mandate, his contribution to his EPF account is 12% of his salary. However, he decides to contribute an additional 8% per month to VPF. His employer pays 3.67% of Rs .15000 as his contribution to Ranjan’s EPF account. Also, the VPF interest rate in 2020 is 8.5% per annum.

The table below illustrates the interest calculation on Ranjan’s EPF account.


MonthOpening BalanceInterest (Rs.) [(Opening balance x VPF interest rate) / 1200]
AprilNil
Nil
May6550 [(20% x 30000) + (3.67% x 15000)]
46
June13,100
93
July19650139
August26,200
186
September32,750
232
October39300278
November45850325
December52,400
371
January58,950
418
February65,500
464
March65,500
510
Total3062


Note: We are assuming that Ranjan’s salary remains the same throughout the year.

Therefore, Ranjan earns Rs. 3,062 as an interest in the balance in his EPF account. Since he made an additional contribution of 8% over and above the compulsory percentage to the Voluntary Provident Fund scheme, Rs. 3,062 also constitutes of the VPF interest amount.

However, in VPF accounts, the individuals can choose to allocate a greater percentage of their salary to maximize their returns.

Historical Voluntary PF Interest Rates.

In the past 40 years, the Provident Fund scheme has been one of the most profitable and secure investment options for working individuals. When compared with other such savings schemes such as Bank FD and Public Provident Fund, the VPF interest rates are always marginally higher.





FAQ’s

Loan against mutual funds (LAMF) allows you to borrow cash against your mutual fund investments as collateral. You can use Volt Money to lien mark your mutual funds digitally to avail an instant limit without losing the ownership of your mutual funds and all the associated benefits with it. Funds will be made available in the form of an overdraft facility.

The annual fee for the Axis Privilege Card is typically Rs. 1,500 plus taxes. This fee can be waived if the cardholder achieves an annual spending milestone, though the exact spending amount for the waiver can vary by card variant. For example, a common waiver condition is spending above Rs. 2.5 lakh in an anniversary year.

Luxe Vouchers are digital gift cards that can be redeemed across popular luxury and lifestyle brands such as Myntra, Flipkart, Pantaloons, and more. Once you qualify for the offer, the voucher code will be sent directly to your registered email ID or mobile number. In most cases, vouchers are delivered within 5–7 working days after successful validation of your transaction or application.

Yes, you can apply even with a low CIBIL score, but your chances of approval may be limited. Most banks and lenders prefer a CIBIL score of 750 or above for quick approval and better interest rates. If your score is lower, some lenders may still consider your application based on other factors such as your income, employment stability, or existing relationship with the bank. However, you may be offered a lower loan amount or higher interest rate. Improving your credit score before applying can increase your chances of getting approved on favorable terms.

toast icon URL copied to clipboard successfully !

Download the IndiaLends App Now

  • Track your credit score all the time and stay financially healthy
  • Get exclusive Loans and Credit Card offers
  • Enjoy a seamless experience

Scan this QR code to download the app

index banner image