The Centre has kept interest rates on popular small savings schemes such as the Public Provident Fund (PPF) and the National Savings Certificate (NSC) unchanged for the January-March quarter, marking the eighth consecutive quarter of status quo.
The PPF will continue to earn 7.1%, while the Post Office Savings Account will pay 4% interest, according to the finance ministry’s notification issued on Wednesday. The Sukanya Samriddhi Yojana will maintain its higher return of 8.2%, and the three-year term deposit stays at 7.1%.
The NSC continues at 7.7%, the Kisan Vikas Patra (KVP) offers 7.5% with a maturity of 115 months, and the five-year Post Office Monthly Income Scheme holds steady at 7.4%.
With easing inflation in 2025-26, the Reserve Bank of India cut the repo rate by 25 basis points to 5.25% in its monetary policy review earlier in December. In fact, the apex bank cut its key rates at four of the six monetary policy reviews of 2025 by a cumulative 125bps, fuelling rate cuts across the financial sector and raising expectations that even small savings rates would be revised downwards. One basis point is one-hundredth of a percentage point.
Small savings schemes, primarily offered through post offices and banks, are among the most trusted and risk-free investment options for Indian households. Stability in interest rates helps investors plan for long-term goals, such as retirement, children’s education, and wealth preservation, without the uncertainty of sudden interest rate cuts.
The government reviews and notifies interest rates on these schemes every quarter, based on bond yields and market trends.
The last revision in small savings rates was announced in the fourth quarter of 2023-24.
For comparison, many private banks offer around 3.0% per annum on savings accounts for regular customers, while typical fixed deposit rates range between 6.5% and 7.5% per annum for tenures of one to three years. Some banks offer rates of up to about 7.75% or higher on specific tenures or deposit amounts.
