If you have ₹10 lakh in your EPF, compounding can turn it into crores; here is the math

If you have ₹10 lakh deposited in your EPF account, the amount can grow significantly through interest accumulation if left untouched for the long term. Understand the calculations here based on an interest rate of 8.25%.

EPF serves as a savings avenue for employed individuals. A portion of the salary is deposited into it every month, with a matching contribution from the employer. Additionally, the accumulated amount earns interest.

If you currently have ₹10 lakh in your EPF account, leaving it there for the long term—rather than withdrawing it immediately when not strictly necessary—can be highly beneficial. The reason for this is compound interest. With compounding, interest is earned on the previously accumulated interest as well, allowing the corpus to grow rapidly over time.

How much can ₹10 lakh grow to?

The EPF currently offers an annual interest rate of 8.25% for the 2025-26 financial year. Assuming the interest rate remains at 8.25% in the coming years and no fresh contributions are made to the account, the figures would look like this:

After 10 years: Approx. ₹22 lakh
After 20 years: Approx. ₹48 lakh
After 25 years: Approx. ₹74 lakh
After 30 years: Approx. ₹1.10 crore
In other words, the current ₹10 lakh can grow to over ₹1 crore in about 30 years solely through interest accumulation.

How does compound interest work?

When interest is earned on ₹10 lakh in a year, the interest for the following year is calculated not just on the initial ₹10 lakh, but on the total amount (principal plus previously earned interest). Essentially, both the principal and the accumulated interest grow year after year. This "interest on interest" helps build a substantial corpus over the long term.

Should you withdraw your EPF money?

While there are provisions to withdraw money from the EPF when needed, withdrawing funds for every minor requirement can prove detrimental in the long run. Withdrawing money also stops the accrual of further interest on that amount.

Therefore, if there is no emergency need and you have separate savings available, keeping your EPF funds intact for the long term can help build a substantial corpus for retirement.