The Government of India announced that interest rates for key Small Savings Schemes remain unchanged for the July–September quarter of FY 2025‑26, despite the RBI implementing a 1% repo‑rate cut.
Latest Interest Rates Overview
| Scheme | Interest Rate (Q2 FY26: Jul–Sep 2025) |
|---|---|
| Public Provident Fund (PPF) | 7.1% |
| National Savings Certificate (NSC) | 7.7% |
| Sukanya Samriddhi Yojana (SSY) | ~8.2% |
| Senior Citizen Savings Scheme (SCSS) | 8.2% |
| Kisan Vikas Patra (KVP) | 7.5% |
| Post Office 1-year Time Deposit | 6.9% |
| Post Office 2/3-year Time Deposit | 7.0% |
| 5-year TD | 7.5% |
| 5-year Recurring Deposit | 6.7% |
| Post Office Savings Account | 4.0% |
| Post Office Monthly Income Scheme (POMIS) | 7.4% |
These rates mirror the April–June quarter, marking a fifth consecutive quarter without changes.
Why This Matters
- Stability amid rate cuts: The RBI’s policy easing hasn’t impacted small savers so far, helping maintain predictable returns in a low‑interest environment.
- Safe returns: Schemes like SSY and SCSS offer attractive interest (8.2%)—notably competitive compared to small‑finance bank FDs capped at ~9%.
- Quarterly scrutiny expected: Next evaluation on September 30, as bond yield movements and policy actions could influence rates .
What Should Investors Do?
- Lock in current rates now—expected to remain stable, but could face short‑term cuts later.
- Focus on tax-efficient schemes: PPF, NSC, and SSY offer Section 80C deductions and tax‑free interest, enhancing real returns.
- Assess alternatives: Senior citizens may still find better yields via SCSS or top‑tier small bank FDs if they don’t mind slight additional risk.
- Diversify across tenures: Combining SSY for long‑term, SCSS for safety plus shorter‑term TDs and FDs can optimize income and liquidity.
Bottom Line
Despite macroeconomic headwinds, small savers enjoy predictability and competitive government-backed returns in the current quarter. Stability, tax benefits, and yield visibility make these schemes a compelling anchor in balanced portfolios—especially for risk-averse or income-focused investors.
