For the third quarter of FY 2025-26, the government has not made any changes in the interest rates of small savings schemes
The government has not made any changes in the interest rates of small savings schemes for the October-December 2025 quarter. This is the seventh consecutive quarter when the rates of these schemes are kept unchanged. The Finance Ministry made an official announcement on Tuesday, 30 September. For the third quarter of this year (Q2FY26), all the small savings schemes including Public Provident Fund (PPF), National Savings Certificate (NSC), Kisan Vikas Patra (KVP) will continue at the same level.
7.1% interest will be available on PPF
Currently, the Public Provident Fund (PPF) is getting 7.1% interest rate, while this rate on Sukanya Samriddhi Yojana is 8.2%. The government takes care of the country’s economic condition, inflation and liquidity (availability of cash) while determining these rates. However, the interest rates of small savings schemes are reviewed every three months. Such interest rates are usually between 4% to 8.2%. The last time these rates increased in December 2023.
How is interest rates reviewed?
The formula to fix the interest rates of small savings schemes was suggested by the Shyamala Gopinath Committee. According to this formula, the interest rates of these schemes should be 0.25% more than 1% from the yield of the same period issued by the government. This ensures that households (domestic savings) get appropriate returns on their investment. Therefore, the government keeps reviewing these rates every quarter and makes adjustments according to the economic conditions of the country.
Why are small saving schemes important?
Small savings schemes are the main source of household savings in India. There are a total of 12 types of instruments, which give fixed interest to the deposits. The amount deposited from the small savings scheme is deposited in the National Small Savings Fund (NSSF), which helps in completing the country’s government financial deficit. These schemes can be divided into three categories.
- Postal Deposit: Savings accounts, recurring deposits, time deposits, and monthly income scheme
- Saving Certificate: National Saving Certificate (NSC), Kisan Development Patra (KVP)
- Social Security Scheme: Public Provident Fund (PPF), Sukanya Samriddhi Yojana, Senior Citizen Savings Scheme (SCSS)
Interest is available on small savings schemes
- Public Provident Fund (PPF): 7.1%
- Senior Citizen Savings Scheme (SCSS): 8.2%
- Sukanya Samriddhi Yojana (SSY): 8.2%
- National Saving Certificate (NSC): 7.7%
- Kisan Vikas Patra: 7.5%
- Post Office Monthly Income Scheme (MIS): 7.4%
- 1 year fixed deposit: 6.9%
- 2 year fixed deposit: 7.0%
- 3 years fixed deposit: 7.1%
- 5 years fixed deposit: 7.5%
- 5 year recurring deposit: 6.7%