General Provident Fund(GPF) – Eligibility, Interest Rate & Nomination

Updated: 07-07-2025 10:21:11 AM

The GPF or General Provident Fund is a savings scheme available to government employees who joined service before 2004. The interest rate on the GPF is set every quarter and stands at 7.1% for Q2, 2025-26 (July-September 2025). A subscriber can withdraw the GPF amount on leaving government service or on retirement. He/she can also make partial withdrawals after 15 years of service or within 10 years before the date of retirement on superannuation.

Key Features of General Provident Fund (GPF)

• Currently, GPF offers an interest rate of 7.1% (Q2 FY 2025-26)
• A government employee can become a GPF member by contributing a certain percentage of his salary to GPF, as per the pensioners’ official portal, i.e. https://pensionersportal.gov.in/
• A monthly subscription is needed for GPF except for the period when the subscriber is under suspension
• As per the pensioner’s portal, subscriptions to GPF are stopped three months before the date of superannuation
• The subscriber need not submit any application for the final fund payment
• Upon the retirement of the subscriber, immediate payment of the final balance is done
• The subscriber needs to make a nomination in the name of a member of the family at the time of joining GPF. In case of the subscriber’s untimely demise, the nomination gives the right to one or more persons to receive the accumulated credit fund
• The nominee is entitled to get an additional payment equal to the average balance in the deceased’s account over the three years preceding the employee’s death, as per GPF regulations
• The maximum additional amount that is payable under the rule is Rs. 60,000. Moreover, the employee must be actively in service for a minimum of five years to be eligible for this benefit.

Eligibility for GPF

According to the GPF rules, the following are eligible to subscribe to General Provident Fund account:

• All temporary government servants after continuous service of 1 year
• All permanent government servants
• All re-employed retired government pensioners
• All government servants working in establishments covered by the EPF Act, 1952

However, government servants joining after 2004 are not eligible for GPF. They are covered by the National Pension System (Central Government) or National Pension System (State Government) as the case may be. You can read more about the NPS here.

GPF Interest Rate

The General Provident Fund interest rate is set by the Central Government and reviewed annually. The GPF interest rate for Q2 FY 2025-26 is fixed at 7.1% p.a. Moreover, the interest is calculated yearly and credited to the employee’s GPF account at the end of each financial year.

GPF Contribution Amount

The amount of GPF contribution is fixed by the subscriber only. However, the minimum GPF contribution should not be less than 6% of the total salary of the employee, while the maximum contribution can go up to 100% of the employee’s salary.

GPF Nomination

A government employee who is a member of the GPF can specify a nominee for his GPF account. The nominee must be a family member, if the government employee has a family. A minor can be nominated only once he/she becomes a major. In case the government employee has more than one nominee, he must specify the share of each nominee.

Advances from the General Provident Fund

Given below are a few key things/GPF loan rules that one must consider when making advances from the General Provident Fund:

• If the government employee borrows any amount from the GPF fund, he/she will have to pay an interest rate of 2.5% above the interest rate of the GPF.
• The maximum limit of advances from the GPF is three months’ salary or half the amount in the GPF account, whichever is less.
• Advances from the fund will be allowed on the following grounds:

– Treatment for illness and travel expenses of the government servant’s family during the illness

– Higher education outside of India

– Higher education in India of at least 3 years duration

– Marriage, funeral or other ceremonies

– Legal expenses

– Purchase of TV, washing machine, cooking range, geyser, computer, etc.

– Pilgrimage

Maturity and Withdrawal Process of GPF

Withdrawals will be permitted after a government employee completes 15 years of service or within 10 years before the date of retirement on superannuation. The maximum limit for a withdrawal from the GPF is 6 months’ pay or half the balance in the GPF account, whichever is less. The limit can be extended to 90% of the GPF balance if the sanctioning authority allows it, considering the subscriber’s status, needs and GPF balance. Withdrawals can be made from the GPF on the following grounds:

• Post high-school education in India or abroad of the subscriber or his children including traveling costs
• Children’s marriage
• Medical treatment of the subscriber or his family including traveling expenses
• Purchase of TV, washing machine, cooking range, geyser, computer, etc.
• Building or purchasing a house or repaying a home loan
• Renovating a house
• Purchase of an insurance policy or a pension approved under the GPF rules

The subscriber must use the withdrawal only for the stated object of withdrawal and not for any other purpose. The subscriber can also convert an advance into a withdrawal by submitting a written request to the relevant accounts officer.

GPF on Exit from Government Service

The subscriber can withdraw the entire balance from the GPF account when he leaves government service.

GPF Withdrawal on Retirement

The subscriber can withdraw the entire balance from GPF when he retires.

GPF Withdrawal on the Death of the Subscriber

Where a nomination has been made for GPF, the entire amount will be paid to the nominee. However, where no nomination has been made, the subscriber’s family will be paid the GFP money in equal shares. However, the following family members will be excluded from getting share:

• Adult sons
• Adult grandsons
• Married daughters whose husbands are alive
• Married daughters of a deceased son whose husbands are alive

FAQs

Q. What is the difference between EPF, PPF and GPF?

Basis	EPF	GPF	PPF
Full Form	Employees Provident Fund	General Provident Fund	Public Provident Fund
Interest Rates	8.25%	7.1%	7.1%
Eligibility	Private employees	Government employees	All individuals
Maturity Period	Till retirement (Up to 58 years of age)	Till retirement	15 years
Minimum Deposit	12% of the basic salary	6% of the basic salary	Rs. 500 p.a.
Maximum Deposit	12% of the basic salary	100% of the basic salary	Rs 1.5 lakh p.a.
Premature Closure	Being unemployed for more than 60 days	In case the individual quits their job	Allowed after 5 years in case of emergency purposes

Q. Can I open both GPF and PPF?

Ans. Yes, you can open a PPF account if you have a GPF or EPF. However, you can have only one PPF account in your name.

Read more about PPF/Public Provident Fund

Q. When does a GPF account mature?

Ans. A GPF account matures at the time of retirement/superannuation of the respective government employee.

Q. Can I have both GPF and NPS?

Ans. Yes, you can invest in NPS irrespective of your contribution to any Provident Fund.

Q. Does GPF have tax benefits?

Ans. Yes, GPF offers tax benefits. Employee contributions to GPF of up to Rs. 1.5 lakh per annum are deductible under Section 80C of the Income Tax Act. Moreover, interest that you earn on GPF is also tax-free and no tax is levied during withdrawal.

Q. How much of the salary does GPF deduct?

Ans. GPF or General Provident Fund  usually deducts 6% of your basic salary.

Q. On the demise of the subscriber, who does the amount go to?

Ans. In case of the subscriber’s demise, the nominee of legal heir receives the GPF amount, as specified by the subscriber during his/her lifetime. In case no nominee or legal heir is mentioned, then the person who makes claim as per the succession laws applicable shall get the GPF amount.

Q. What are the key benefits of investing in General Provident Fund (GPF)?

Ans. Given below are some of the key benefits of investing in GPF:

• Secure retirement: Investment in GPF ensures a secure retirement for government employees by providing a source of funds post-retirement.
• Guaranteed returns: Guaranteed returns are offered at a fixed interest rate, which the government reviews and revises periodically.
• No-risk investment: Since GPF is backed-up by the government and offers a fixed rate of return it is a no-risk investment option.
• Tax benefits: Contributions made to GPF are eligible for tax deduction under Section 80C of the Income Tax Act.
• Flexibility: GPF also offers flexibility in terms of withdrawals and partial withdrawals as the employee can make use of these in case of emergencies or unforeseen circumstances.
• Loan facility: Loans can be availed by government employees for various needs such as constructing a house, medical expenses, education, etc.