The Centre has decided to maintain the status quo on the interest rate on the General Provident Fund (GPF) and other related funds. According to a notification issued by the Ministry of Finance, the interest rate on GPF will remain at 7.1% for the third quarter of the financial year 2025-26 (October 1 to December 31, 2025).
What is GPF, and who is covered under it?
The GPF is a compulsory savings scheme for central and state government employees that provides them financial security after retirement. Only government employees — those in permanent service with the central or state government — can join this scheme.
Employees deposit a fixed portion of their salary (typically a minimum of 6%) into their GPF account every month. The government also pays interest on the GPF, which is fixed every quarter.
How are interest rates reviewed?
GPF interest rates are reviewed every three months, i.e., on a quarterly basis. A notification is issued by the Department of Economic Affairs, Ministry of Finance. These rates are generally kept in line with the government’s small savings schemes to maintain interest rate balance.
Which funds are subject to this rate?
This 7.1% interest rate applies not only to GPF, but also to other related funds such as: Contributory Provident Fund (India),
All India Services Provident Fund, State Railway Provident Fund, Defense Services Officers Provident Fund, and General Provident Fund (Defense Services).
Other retirement schemes: PPF, NPS, and EPF
Like GPF, the Public Provident Fund (PPF) is also a long-term savings scheme, but it is open to ordinary citizens. The current interest rate on PPF is 7.1% — the same as GPF.
Meanwhile, the Employees’ Provident Fund (EPF) is for private sector employees, and its current interest rate is 8.25% (financial year 2024-25).
Investments in the National Pension System (NPS) are market-linked, so returns are not fixed, but they can provide better returns in the long run.
Interest rates on small savings schemes also unchanged
Recently, the government kept the interest rates on small savings schemes unchanged for the October-December 2025 quarter. This includes schemes like PPF, Sukanya Samriddhi Yojana, Senior Citizen Savings Scheme, and National Savings Certificate.
Why is GPF important?
GPF is a safe and guaranteed return instrument for government employees. The amount deposited is completely protected, and the interest is tax-free. This scheme provides financial support to employees in the form of a lump sum after retirement.
Summing up…
By keeping interest rates unchanged this time, the government has clearly indicated that stability is a priority. Schemes like the GPF, where interest rates are fixed and secure, remain one of the most reliable investment options for government employees.