Small Savings Interest Rate Revision: Investors in small savings schemes like PPF and NSC may see changes in the near future. The Ministry of Finance may review the interest rates of small savings schemes on December 31, 2025. If the government announces new interest rates, they will be applicable for the January-March 2026 quarter. A large number of people in the country invest in these schemes as they are considered the most reliable option for safe investment.
Currently, the highest interest rates on small savings schemes are offered by the Sukanya Samriddhi Yojana and the Senior Citizens Savings Scheme. Both schemes offer an interest rate of 8.2 percent. The Public Provident Fund (PPF) currently offers an interest rate of 7.1 percent. This year, the Reserve Bank of India (RBI) has reduced the repo rate by a total of 1.25 percent, following which many banks have reduced their fixed deposit interest rates.
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Despite the reduction in the repo rate, the government has not yet made any changes to the interest rates of small savings schemes. The rates for these schemes have been kept unchanged for the October-December 2025 quarter. Currently, the National Savings Certificate offers 7.7 percent interest, the Post Office Monthly Income Scheme offers 7.4 percent, and the Kisan Vikas Patra offers 7.5 percent interest.
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According to financial experts, the government reviews the interest rates of these schemes every three months. Viral Bhatt, founder of Money Mantra, says that the government may reduce interest rates if needed. The Ministry of Finance and the RBI together take decisions keeping in mind market conditions, inflation, and government bond yields. In the past few years, interest rates have been changed based on these factors.
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The government uses a fixed formula to determine the interest rates of small savings schemes, which is based on the prevailing market yields. The RBI provides the government with information on the current yield curve. Experts believe that there is a possibility of changes in interest rates in the coming quarter as well. Despite this, investors’ confidence in these schemes has not diminished. The Public Provident Fund (PPF), in particular, is considered one of the most preferred options for long-term investment. This scheme matures in 15 years, and regular contributions can build a substantial fund. Since these schemes are backed by the government, people don’t have to worry much about the safety of their money.