Recently, the Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) has cut the repo rate by 25 basis points for the second consecutive time, bringing it down to 6%. After this decision, many banks have reduced their interest rates, which is directly affecting the interest on fixed deposits (FD). However, there is still some relief for investors, as many small savings schemes still offer interest rates up to 8.2%.

Most small savings schemes offer good returns between 7-8% per annum, which is higher than the typical 6-7% annual return of fixed deposits (FD). For example, SBI offers 6.7% interest on a 1-year FD, while other banks such as Union Bank of India (6.75%), Bank of Baroda (6.85%), HDFC Bank (6.6%), and ICICI Bank (6.7%) also offer interest rates around this range.

At the same time, senior citizens get an additional 0.50 percent interest on these deposits. Small savings schemes running in the country offer interest ranging from 6.7 to 8.2 percent. Investors get 8.2 percent interest in Senior Citizen Savings Scheme (SCSS) and Sukanya Samriddhi Yojana (SSY).

Sukanya Samriddhi Account Scheme-
The interest rate on Sukanya Samriddhi Account Scheme is 8.2 percent. The government increased this interest rate from 8 percent to 8.2 percent in January 2025. The interest on this account is compounded annually. (Sukanya Samriddhi Account Scheme)

Senior Citizen Savings Scheme (SCSS)-
Senior Citizen Savings Scheme is getting 8.2 percent interest on a quarterly basis. This interest rate was increased from 8 percent to 8.2 percent in April 2023 and is applicable till now. The minimum deposit in this scheme starts from Rs 1000 and investors can invest up to Rs 30 lakh. (senior citizen saving schemes)

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