5 Small Savings Schemes Offering Higher Returns Than Bank FDs in 2025 – Check Latest Rates

After the recent cut in the repo rate by 100 basis points or 1% by the Reserve Bank of India (RBI), many banks have reduced their interest rates on fixed deposits (FDs) and savings accounts. However, the government has kept the interest rates on small savings schemes like Public Provident Fund (PPF), National Savings Certificate (NSC), Senior Citizen Savings Scheme (SCSS), and others unchanged till June 30, 2025. The new rates will be applicable for the September quarter of the financial year 2025-26.

In such a situation, if you are thinking of investing in a bank’s fixed deposit, then before that, definitely compare the FD rates of many top banks like State Bank of India (SBI), HDFC Bank, ICICI Bank, and Punjab National Bank (PNB) with government small savings schemes. Because many government savings schemes are giving much higher returns than these banks. Let us tell you about 5 such small savings schemes, which are better than the FD rates of top banks and keep your money completely safe.

5 major government small savings schemes that give better returns than bank FDs

Whether for short-term or long-term, these government schemes will give you more profit than bank FDs:

National Savings Certificate (NSC)

This is an excellent scheme with a lock-in period of 5 years. Currently, it is getting 7.7% interest. The money invested in it is completely safe and also gets tax benefits under the Income Tax Section 80C.

Post Office Time Deposit (POTD)

This is also a safe option, which gives 7.5% interest for 5 years. All citizens can invest in it.

Senior Citizen Savings Scheme (SCSS)

This is a scheme specially designed for senior citizens (60 years and above). It gives the most attractive interest of 8.2%. Tax exemption is also available on investment in it.

Sukanya Samriddhi Yojana (SSY)

This is a great scheme for the future of daughters. It is also currently getting a high interest of 8.2%. Tax exemption is available on investment, interest, and withdrawal (EEE benefit).

Public Provident Fund (PPF)

This is a long-term (15 years) investment scheme. Although its rates are slightly low (7.1%), it is very popular due to the EEE benefit (tax exemption on investment, interest, and withdrawal). It helps in creating a great fund for retirement and children’s education.

Post office schemes are backed by the Government of India. Due to this government support, these accounts are especially for those people. These are attractive for those who want to earn fixed interest while keeping their principal amount completely safe. The amount deposited here is fully guaranteed by the government, no matter how big it is.

On the other hand, bank fixed deposits (FDs) are also considered safe investments, but there is a limit to their protection. Most banks are covered under the Deposit Insurance and Credit Guarantee Corporation (DICGC). However, bank depositors should keep in mind that their money is insured only up to ₹5 lakh (including interest). The amount above this limit may or may not be recovered in case the bank fails. Hence, post office schemes are considered a safer option for large deposits.