Small Savings Schemes: Govt Reveals New PPF, NSC Interest Rates for July-Sept FY26
The Indian government has released the updated interest rates for small savings schemes for the July to September 2025 quarter. These rates are reviewed every three months. This helps investors stay updated and make better choices for their money.
We all want to grow our savings safely. That’s where small savings schemes come in. They’re backed by the government, easy to invest in, and come with fixed returns. Well-known schemes such as the Public Provident Fund (PPF), National Savings Certificate (NSC), and Senior Citizens Savings Scheme (SCSS) continue to be wise choices for many households.
We’ll walk you through the new interest rates, what they mean for us, and how to pick the best scheme based on our needs. Whether you’re saving for retirement, a child’s future, or just looking for steady growth, these updates will help you plan better.
Let’s take it one step at a time and go through it slowly.
What the Rates Are
Here are the unchanged interest rates for the quarter:
- PPF (Public Provident Fund): 7.1%
- NSC (National Savings Certificate): 7.7%
- SCSS (Senior Citizens Savings Scheme): 8.2%
- SSY (Sukanya Samriddhi Yojana): 8.2%
- Kisan Vikas Patra (KVP) provides a 7.5% annual return and matures in 115 months, making it a reliable long-term savings option.
- MIS (Monthly Income Scheme): 7.4%
- Post Office Savings Deposit: 4%
- Time Deposits (Post Office FDs): 1-year: 6.9%, 2-year: 7.0%, 3-year: 7.1%, 5-year: 7.5%
- 5-year RD: 6.7%
These match the figures from April–June FY26.
Why No Changes?
The RBI cut its repo rate by 1%, which made bond yields lower. Normally, we’d expect small savings rates to follow these yields. But the government chose to keep the rates steady to preserve stability for savers.
This helps households plan. But it also means these rates remain higher than many bank FDs, which now offer around 6.5%–7.5%.
Why It Matters to Us
These schemes matter because:
- They are safe, backed by the government.
- They offer fixed returns, so we know exactly what we’ll get.
- Many have tax benefits, like PPF, NSC, and SSY, under Section 80C.
They suit us if we want low risk and predictable income.
Rate Comparison: Small Savings vs. Other Options
| Option | Interest Rate | Risk Level |
| PPF, NSC, SSY, SCSS, KVP | 7.1%–8.2% | Low |
| Bank FDs (small banks) | ~8.0%–9.0% | Low–Medium |
| Corporate bonds | 8%–10%+ | Medium–High |
| Mutual funds/stocks | Variable | High |
While small savings have lower returns compared to top FDs or bonds, they are very safe. SSY and SCSS give good income with tax perks.
How to Choose the Right Scheme
We need to match schemes to our goals:
- Long-term tax savings: Go for PPF (15-year lock‑in).
- Sukanya Samriddhi Yojana (SSY), offering 8.2% interest, is an excellent savings plan to secure a girl child’s financial future. Senior income: SCSS gives steady 8.2% payouts.
- Short-term & safe: NSC or KVP are good choices.
- Emergency cash: Post Office savings (4%) or 1-year FD.
Think about how long you want to save, and what you want to do with the money later.
Bottom Line
The government kept rates unchanged for July–September FY26. That benefits those who rely on safe returns. But if inflation or policy changes, rates might move next quarter.
We should check our options regularly. Then we can choose the best mix to grow our money safely and smartly.
FAQS:
National savings schemes are government-backed plans designed to help individuals grow their money safely. They offer fixed returns and are good for long-term or risk-free savings.
Post office savings accounts provide a yearly interest rate of 4%. They are a safe option, with your funds supported by the government.
The Public Provident Fund (PPF) gives 7.1% interest per year. It is a long-term plan with tax benefits and is good for saving money safely.
Disclaimer:
This content is for informational purposes only and not financial advice. Always conduct your research.