The Voluntary Provident Fund (VPF) Interest Rate is an extension of the Employees’ Provident Fund (EPF) scheme, where employees can voluntarily contribute more than the mandatory 12% of their basic salary towards their EPF account. The additional contributions earn the same interest rate as the EPF contribution and provide a secure retirement corpus.
The Employees’ Provident Fund Organisation (EPFO) determines the VPF interest rate and revises it annually. Since the VPF interest rate usually aligns with the EPF interest rate, it serves as an attractive long-term savings option for employees.
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VPF interest is compounded annually but is credited monthly to the employee’s account. The calculation is based on the contributions made throughout the financial year, ensuring steady and consistent growth of savings.
Formula:
For example, if an employee contributes ₹10,000 per month and the VPF interest rate is 8%, the interest calculation would be:
Below is the historical interest rate trend for VPF:
| Financial Year | VPF Interest Rate (%) |
| 2023-24 | 8.15% |
| 2022-23 | 8.10% |
| 2021-22 | 8.50% |
| 2020-21 | 8.50% |
| 2019-20 | 8.65% |
| 2018-19 | 8.55% |
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The Voluntary Provident Fund (VPF) is an excellent savings tool for employees looking to build a secure retirement corpus with high interest rates and tax benefits. Since it is regulated by EPFO, it remains a safe and reliable investment. Employees opting for VPF contributions can benefit from compounding returns, exemptions under Section 80C, and minimal risks. However, considering its lock-in period and tax implications, individuals should evaluate their financial goals before investing.
The VPF interest rate for 2023-24 is 8.15%, as set by EPFO.
Yes, VPF is a safe and tax-efficient long-term investment offering high-interest rates.
Yes, partial withdrawals are allowed under specific conditions like medical emergencies, home purchase, or higher education.
No, only employees contribute to VPF; employers contribute only to the mandatory EPF.
Yes, VPF interest earned above ₹2.5 lakh per annum is taxable as per the individual’s tax slab.
You can opt for VPF contributions through your employer’s payroll department by submitting a request.
At retirement, the VPF corpus can be withdrawn tax-free if held for at least 5 years.
Yes, the VPF balance is automatically transferred when switching jobs, as it is linked to the UAN (Universal Account Number).
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