New Delhi: The Department of Economic Affairs (DEA) has officially notified the interest rates for the General Provident Fund (GPF) and other similar funds for the fourth quarter (Q4) of the financial year 2025-26. Despite the rising yield on government securities and the transition into the 8th Pay Commission era, the interest rate remains frozen at 7.1% for the 20th consecutive quarter.
💡 THE INTEREST STRATEGY: With the 8th CPC Arrears set to be paid in 2027, many employees are planning to dump their lump-sum payouts into GPF. However, at 7.1%, your savings are barely beating the current 6% inflation rate. Unions are now lobbying for a “Special 8th CPC Interest Bonus” of 1% extra for long-term subscribers.
Verify the latest interest rate notifications and bonus orders directly from the Department of Economic Affairs and Ministry of Defence:
*Note: Refer to OM No. 5(4)-B(PD)/2025 for the current Q4 GPF rates.*
1. New Bonus for Defence Civilian Employees
While GPF rates are steady, the Ministry of Defence (MoD) has issued a fresh “New Year Gift” via MoD Order dated 07.01.2026. A 22-day Productivity Linked Bonus (PLB) for the accounting year 2024-25 has been approved for eligible Defence Civilian employees of the Corps of EME. This provides an immediate cash inflow of approx ₹5,000 to ₹7,000 for Group ‘C’ staff.
2. The “Savings Gap” in 2026
As DA hits 60%, your gross salary increases, but your retirement corpus depends on the GPF multiplier. Here is how the 7.1% rate impacts your future compared to the requested 8%:
| Investment Amount | Annual Interest (7.1%) | Annual Interest (8.0% Demand) |
|---|---|---|
| ₹10,00,000 | ₹71,000 | ₹80,000 |
| ₹25,00,000 | ₹1,77,500 | ₹2,00,000 |
| Loss to Employee | – | ₹22,500/Year |
3. Will GPF be scrapped for NPS/UPS?
There are rumors that with the Unified Pension Scheme (UPS) implementation, GPF might be restricted. However, for those under the Old Pension Scheme (OPS), GPF remains the only tax-free safety net. It is vital to continue your minimum 6% contribution to remain eligible for the ₹25 Lakh Gratuity benefit.
4. Conclusion
While the 7.1% rate is stable, it lacks the “Excitement” employees were hoping for in the new year. All eyes are now on the Union Budget 2026 to see if the Finance Minister announces a special “Pay Commission Interest Slab” for long-term government savings.
💰 IS YOUR GPF GROWING FAST ENOUGH?