Small Saving Schemes: The Finance Ministry is set to reveal the interest rates for small savings schemes on December 31, 2025. This announcement is seen as quite significant. Every three months, the Finance Ministry evaluates the interest rates for all small savings schemes offered by the post office, including PPF, SCSS, and SSY, and then announces the updated rates.
The new interest rates for the fourth quarter of this financial year, which covers January to March 2025, will be disclosed on December 31. These updated rates will take effect from January 1, 2025. Previously, the interest rates for the third quarter were assessed in September 2025, but there were no changes made at that time.
Currently, the most talked-about issue is the interest rate for the Public Provident Fund (PPF). Right now, PPF provides an interest rate of 7.1 percent, but there are signs that this rate might be lowered. If that happens, it would mark the lowest PPF interest rate in 50 years. However, no official updates have been provided regarding this situation.
Interest rates have remained steady for the past 7 quarters.
This marks the seventh consecutive quarter where the rates for these schemes have stayed the same. This means that investors are still getting the same returns as those established for the April-June 2024 quarter. The big question now is whether this will change in the upcoming January-March quarter.
The schemes affected by the interest rate decisions include the Public Provident Fund (PPF), Sukanya Samriddhi Yojana (SSY), National Savings Certificate (NSC), Kisan Vikas Patra (KVP), Senior Citizens Savings Scheme (SCSS), and others. A reduction in rates this time could be a major blow for investors. On the flip side, an increase in interest rates would be a positive development for them.
Sukanya Samriddhi Yojana
The Sukanya Samriddhi Yojana (SSY) currently provides an interest rate of 8.2% per year. This scheme was specifically created to help with the education and marriage costs of daughters. Interest is added each year and compounded.
Senior Citizens Savings Scheme
The Senior Citizens Savings Scheme (SCSS) also offers an interest rate of 8.2% per year. A unique feature of this scheme is that the interest is credited directly to the account every three months. This makes it a dependable source of steady income for retirees.
Post Office Monthly Income Scheme
If you’re looking for a consistent monthly income, the Post Office Monthly Income Scheme (POMIS) is a solid choice. It provides an annual interest rate of 7.4%, and the funds are credited to your account every month.
PPF and NSC
The Public Provident Fund (PPF) is one of the most favored long-term investment options. It offers a tax-free annual interest rate of 7.1%. Meanwhile, the National Savings Certificate (NSC) provides a fixed interest rate of 7.7%. Both of these schemes are seen as great choices for those wanting a secure investment.
Understanding how post office interest rates are set
The government assesses the interest rates on post office schemes every quarter. These rates are based on the suggestions from the Shyamala Gopinath Committee. The committee advised that the interest rates for these schemes should be 25 to 100 basis points higher than the yield on government bonds for the same maturity period.