Web Desk: The federal government has reduced the annual profit rate paid on General Provident Fund (GPF) savings held by government employees, lowering returns on accumulated balances for the 2025-26 financial year.
According to a government notification, the GPF profit rate has been set at 12.05% for the financial year 2025-26, down from 12.46% in the previous fiscal year.
The latest decision represents a reduction of 0.41 percentage points in the annual return paid on GPF deposits and subscribers’ credit balances.
The new rate will apply to eligible federal government employees’ GPF accounts for the 2025-26 financial year. Authorities will calculate annual profits on the balances maintained in these accounts using the revised rate.
The notification also refers to several provident funds administered by the Ministry of Railways and the Ministry of Defence.
However, the relevant departments will issue separate instructions regarding the applicable profit rates and related arrangements for provident fund balances under their respective control.
The GPF is a compulsory savings mechanism for eligible federal government employees. Under the system, a specified amount is deducted from employees’ salaries on a regular basis and credited to their individual GPF accounts.
Over the course of employment, these contributions accumulate and earn annual returns at a rate determined by the government.
Employees can receive their accumulated GPF savings, along with applicable returns, upon retirement or in other circumstances permitted under the relevant rules.
The lower rate means government employees with substantial GPF balances will receive slightly less annual profit than they would have under the previous rate.
For example, an employee whose GPF account carries a significant balance will now have annual returns calculated at 12.05%, compared with 12.46% during the previous financial year.
The actual difference in earnings will depend on the amount held in each employee’s account.
Although the reduction is relatively modest, it will affect the annual returns earned by federal employees who maintain GPF savings.
With the revised rate now applicable for 2025-26, employees’ GPF balances will generate returns according to the newly notified 12.05% rate.
The change therefore marks a reduction in the financial return on one of the key long-term savings mechanisms available to federal government employees.
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