Interest rates on small savings schemes: The Finance Ministry reviewed the interest rates of small savings schemes on 30 September 2025, in which the rates of schemes like Public Provident Fund (PPF), National Savings Certificate (NSC), and Sukanya Samriddhi Account (SSA) were kept unchanged. These rates will be applicable for the quarter of October to December 2025.
Reduction in repo rate: This year, the Reserve Bank of India (RBI) has cut the repo rate three times. This rate was 6.5% in January, which was reduced by 1% in February and April with a reduction of 25 basis points and 50 basis points in June. Despite this, the government has kept the interest rates of small savings schemes stable, which is a positive sign for investors.
Government Bond Yield: The interest rates of small savings schemes depend on the government bond (G-SEC) yield. The 10-year G-SEC yield declined from 6.78% on 1 January 2025 to 6.45% on 24 September 2025. According to the Shyamala Gopinath Committee, the PPF rate should be 25 basis points higher than the G-SEC yield, which is an average of 6.66%, while the current PPF rate is 7.1%.
Final change: The last change in interest rates took place in January-March 2024, when the rate of 3-year fixed deposit was increased from 7% to 7.1% and the rate of Sukanya Samriddhi Yojana was 8% to 8.2%.
0- 4% on savings
1-year fixed deposit: 6.9%
2-year fixed deposit: 7%
3-year fixed deposit: 7.1%
5-year fixed deposit: 7.5%
5-year recurring deposit: 6.7%
Senior Citizen Savings Scheme: 8.2%
Monthly Income Scheme: 7.4%
National Savings Certificate: 7.7%
Public Provident Fund: 7.1%
Farmer Vikas Patra: 7.5% (maturity 115 months)
Sukanya Samriddhi Account: 8.2%
Investors dependence: Millions of Indians, especially senior citizens and middle class, are dependent on small savings schemes for stable returns. Reduction in interest rates can affect their income. The government is trying to maintain a balance between the guidelines and social needs of the Gopinath Committee.
