The Ministry of Finance has announced that interest rates on various small savings schemes will remain unchanged for the second quarter of the financial year 2025-26, which runs from July 1 to September 30. This marks the sixth consecutive quarter that rates have been held steady, according to a statement released by the Finance Ministry on Monday, June 30.
Citing consistency and the goal of supporting household savings, the government decided to maintain the current interest rates across all major small savings instruments. These schemes, popular among risk-averse investors, are largely operated through post offices and banks.
Here is a snapshot of the applicable interest rates for Q2 FY 2025-26:
- Public Provident Fund (PPF): 7.1%
- Sukanya Samriddhi Yojana: 8.2%
- Three-Year Term Deposit: 7.1%
- Post Office Savings Account: 4.0%
- Kisan Vikas Patra (KVP): 7.5% (matures in 115 months)
- National Savings Certificate (NSC): 7.7%
- Monthly Income Scheme (MIS): 7.4%
The Ministry’s notification, as reported by news agency PTI, confirms that the rates will remain the same as those announced for the April–June quarter of FY 2025-26. The last revision to any of these schemes was made in the January–March quarter of FY 2023-24.
The consistent interest rates are part of the government’s strategy to encourage steady household savings amid fluctuating returns from market-based investments. According to The Hindu Business Line, this move aligns with efforts to keep traditional saving avenues attractive compared to riskier options like equities.
Small savings schemes continue to be a cornerstone of financial planning for millions of Indians, especially in rural and semi-urban areas. Their guaranteed returns and sovereign backing make them a preferred choice for long-term and retirement-oriented savings.
The Finance Ministry reviews and notifies small savings interest rates quarterly, taking into account movements in benchmark government securities yields. However, the final rates are often influenced by broader economic considerations, including inflation and liquidity conditions.
