Small Saving Schemes- If you are a investor or planning for invest on something then this article is for you. The interest rates of other small savings schemes like Public Provident Fund Scheme, National Savings Certificate are to be reviewed on 30 June 2025. The new rates will be effective for the July-September quarter of the financial year 2025-26. So far this year, there has been no change in the interest rates of post office schemes including Sukanya Samriddhi Yojana and Senior Citizen Savings Scheme. It is expected that there may be a change in this from July 1, 2025.

The reason for this possibility is the reduction in repo rate by the Reserve Bank of India. RBI first reduced the repo rate by 25 basis points in February. Then it was reduced by 25 basis points in April and by 50 basis points in June. So far the repo rate has been reduced by one percent. In response to the reduction in repo rate, banks have reduced the interest rate on fixed deposits. Some banks have also closed their special FDs, which used to offer higher interest rates than normal bank FDs for a certain period.

PPF interest rate may go below 7%

Currently, investors in the PPF scheme get interest at the rate of 7.10 percent. It is being estimated that for the first time in several decades, the interest rate of PPF may go below seven percent. Since the beginning of the April-June 2025 quarter, the average return on 10-year government bonds has been 6.30%.

In the Gopinath Committee’s formula for small savings schemes, the interest rate on PPF has been kept 25 basis points higher than the return on the average 10-year government bond in the last quarter. If this formula is adopted, the interest rate on PPF can be 6.55% in the July-September quarter. This means that the interest rate on PPF can go below seven percent for the first time in five decades. Experts believe that the Gopinath Committee’s formula is just an indicator. This formula does not force the government to take a decision. Even before this, PPF rates have been different from this formula.

In the year 2016 and 2017 also, the return on 10-year government bonds had come down to 6.5%, but the government kept the interest rates of PPF stable. Whereas, in the year 2018, the return on 10-year government bonds had increased to about 8%, but the government kept the interest rate of PPF stable at 7.6%.

Which small savings scheme offers the current interest rate (in percentage)

Senior Citizen Savings Scheme 8.2

Sukanya Samriddhi Yojana 8.2

Public Provident Fund Scheme 7.1

National Savings Certificate 7.7

Kisan Vikas Patra 7.5

Post Office Monthly Income Scheme 7.4

Post Office Term Deposit Scheme for 1 year to 5 years 6.9 to 7.5

5 Year Post Office Recurring Deposit Scheme 6.7​

Will the government really cut rates?

However, while deciding the rates, the government takes into account not only the market trends but also social and political aspects. These schemes are very important for retired people, middle class and small investors. Therefore, the government can avoid making a huge cut in their rates. But a cut of 25 to 50 basis points can be made.

Investors can take advantage now

If you are thinking of investing in small savings schemes, you can take advantage of the current rates before 30 June 2025. In PPF and Sukanya Samriddhi Yojana, new rates are applicable every quarter on existing accounts. Therefore, even by investing in them now, interest rates cannot be fixed.

At the same time, investing now in NSC, Kisan Vikas Patra, Post Office Term Deposit Scheme, Senior Citizen Savings Scheme and Post Office Monthly Income Scheme will fix the current high interest rate, which will remain the same for the entire period of investment.