Small Savings Schemes: Interest Rates Set to Change from April – What Investors Need to Know
The government revises interest rates on small savings schemes such as the Public Provident Fund (PPF), Senior Citizen Savings Scheme (SCSS), National Savings Certificate (NSC), and Sukanya Samriddhi Yojana (SSY) every quarter. However, for the past four quarters, these rates have remained unchanged. As we enter the first quarter of the financial year 2025-26, there is growing anticipation of potential revisions in these interest rates.
The Post Office offers several small savings schemes tailored for different categories, including women, children, senior citizens, and general investors. Popular options include Term Deposits, Recurring Deposits, and the Sukanya Samriddhi Account. These schemes provide guaranteed returns, making them a reliable and secure choice for investment.
The government last revised interest rates for small savings schemes on December 31, 2024, keeping them unchanged for the fourth consecutive quarter. However, with the new financial year approaching, fresh interest rates will be announced on March 31, 2025, for the April-June quarter.
While rates have been stable for the past year, experts believe adjustments could be made this time. Below is the current interest rate chart for small savings schemes:
| Investment Option | Interest Rate (%) | Compounding Frequency |
|---|---|---|
| 1-Year Time Deposit | 6.9% | Quarterly |
| 2-Year Time Deposit | 7.0% | Quarterly |
| 3-Year Time Deposit | 7.1% | Quarterly |
| 5-Year Time Deposit | 7.5% | Quarterly |
| 5-Year Recurring Deposit | 6.7% | Quarterly |
| Senior Citizen Savings Scheme (SCSS) | 8.2% | Quarterly |
| Monthly Income Account (MIS) | 7.4% | Monthly |
| National Savings Certificate (NSC) | 7.7% | Annual |
| Public Provident Fund (PPF) | 7.1% | Annual |
| Kisan Vikas Patra (KVP) | 7.5% | Annual |
| Mahila Samman Savings Certificate | 7.5% | Quarterly |
| Sukanya Samriddhi Yojana (SSY) | 8.2% | Annual |
This scheme offers four tenure options ranging from 1 to 5 years. The interest rates vary from 6.9% (1-year FD) to 7.5% (5-year FD), making it a flexible and secure investment option.
The 5-year RD scheme allows small monthly contributions, similar to SIPs in mutual funds. Currently, the interest rate stands at 6.7%, which was increased from 6.5% in October 2023.
Designed for senior citizens, SCSS offers an attractive 8.2% interest rate, payable quarterly. Investors can deposit a minimum of ₹1,000 and a maximum of ₹30 lakh.
This scheme provides a stable monthly income with an interest rate of 7.4%. The interest is taxable, and the government reviews the rate quarterly.
With a 5-year lock-in period, NSC offers an interest rate of 7.7%, which is compounded annually and paid at maturity.
PPF remains a popular long-term savings option with a tax-free interest rate of 7.1%. Partial withdrawals are allowed after five years, and investments up to ₹1.5 lakh per year qualify for tax benefits.
KVP currently offers a 7.5% annual interest rate with a maturity period of 115 months. In April 2023, the government reduced the maturity period from 120 months to 115 months.
This women-centric savings scheme offers 7.5% interest over a two-year tenure. The last date to invest is March 2025, and no extension has been announced in the 2025 budget.
Aimed at securing the financial future of girl children, SSY currently offers the highest interest rate of 8.2%, compounded annually.
Given the economic conditions and inflation trends, financial experts predict a possible hike in select small savings schemes' interest rates. Investors should stay updated with government announcements to maximize their returns.
For the latest updates, visit the official Post Office or government websites before making investment decisions.
