Small Savings Schemes: PPF, NSC, SSY Rates Unchanged for July-September 2025 Quarter

KhabriDose.com Business Desk: Small Savings Schemes: Govt Keeps PPF, NSC, Sukanya Samriddhi Rates Unchanged for July-September Quarter of FY26 New Delhi, India – June 30, 2025 – In a significant decision offering continuity to millions of small savers, the Indian government today announced that interest rates for various small savings schemes, including the popular Public Provident Fund (PPF) and National Savings Certificate (NSC), will remain unchanged for the July-September quarter of Fiscal Year 2025-26 (Q2 FY26). This marks the sixth consecutive quarter that these rates have been kept stable, providing relief to depositors amidst a period of fluctuating market interest rates. The Union Finance Ministry, through a notification issued on Monday, confirmed that the rates for the period starting July 1, 2025, and ending September 30, 2025, will be the same as those applicable for the preceding April-June 2025 quarter. This decision comes despite a noticeable decline in government securities (G-sec) yields and a cumulative 100 basis points (1%) cut in the repo rate by the Reserve Bank of India (RBI) earlier in 2025, which had led to widespread expectations of a downward revision. Key Interest Rates for July-September 2025 Quarter (Q2 FY26): Savers can continue to earn the following interest rates from July 1, 2025:

• Public Provident Fund (PPF): 7.1% (compounded annually)
• National Savings Certificate (NSC): 7.7% (compounded annually, payable at maturity)
• Sukanya Samriddhi Yojana (SSY): 8.2% (compounded annually)
• Senior Citizens’ Savings Scheme (SCSS): 8.2% (compounded quarterly and paid)
• Post Office Monthly Income Scheme (POMIS): 7.4% (paid monthly)
• Kisan Vikas Patra (KVP): 7.5% (matures in 115 months, i.e., 9 years and 7 months)
• Post Office Time Deposits (1-year): 6.9% (compounded quarterly)
• Post Office Time Deposits (2-year): 7.0% (compounded quarterly)
• Post Office Time Deposits (3-year): 7.1% (compounded quarterly)
• Post Office Time Deposits (5-year): 7.5% (compounded quarterly)
• Post Office Recurring Deposit (5-year): 6.7% (compounded quarterly)
• Post Office Savings Account: 4.0% (compounded annually)
• Mahila Samman Savings Certificate: 7.5% (compounded quarterly)

Why the Rates Remained Unchanged: The decision to maintain the status quo is seen as a move to safeguard the interests of millions of small depositors, especially senior citizens and middle-class households who rely on these schemes for guaranteed income and capital protection. While the interest rates on small savings schemes are technically linked to the yields of government securities of comparable maturities, with a prescribed spread (as per the Shyamala Gopinath Committee recommendations), the government often exercises discretion to prioritize financial stability for savers. Many analysts had anticipated a cut of 25-50 basis points, given the softening of bond yields in the wake of RBI’s repo rate reductions. However, the Finance Ministry’s decision to hold rates steady signals a focus on ensuring attractive returns for household savings, potentially to encourage investment in these government-backed instruments over other volatile options. These schemes, primarily operated through post offices and designated banks, remain a crucial avenue for risk-averse investors seeking fixed, reliable returns. The consistent rates offer predictability, making them a preferred choice for long-term financial planning, retirement savings, and securing the future of girl children. Depositors can continue to benefit from the current rates for the next three months, starting July 1, 2025.

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