The coming days are going to be crucial for Lakhs of Indians investing in post office small savings schemes. The Ministry of Finance is going to review interest rates for the fourth and final quarter (January-March 2026) of the current financial year 2025-26. The announcement is expected around December 31, 2025.
This year, significant changes are expected in the returns on safe investment options like PPF, Sukanya Samriddhi, and Senior Citizen Savings Scheme. If you, too, are thinking of building a large fund in the new year, this decisive decision by the government could change the direction of your investments.
Quarterly Review
The Government of India reviews the interest rates on post office savings schemes every three months. Interestingly, these rates have remained unchanged for the past seven consecutive quarters. Rates were last stabilized in the April-June 2024 quarter, and since then, investors have been content with the same returns.
Given the current economic scenario and inflation, experts believe that the Finance Ministry may give investors a New Year’s gift by increasing interest rates on certain schemes for the period from January to March 2026.
Sukanya and Senior Citizen Schemes
Currently, both the Sukanya Samriddhi Yojana (SSY) and the Senior Citizen Savings Scheme (SCSS) offer the highest interest rate of 8.2%. While the Sukanya scheme offers the benefit of annual compounding interest, the Senior Citizen Scheme’s interest amount is directly credited to the investor’s account every three months. This is a reliable source of regular income for retired individuals.
PPF and NSC
PPF (Public Provident Fund) remains the preferred choice for long-term investments. It offers an interest rate of 7.1%, the biggest advantage of which is its tax-free nature. Meanwhile, the National Savings Certificate (NSC) offers a fixed interest rate of 7.7%. Both schemes are considered the most reliable for those who want to grow their capital while avoiding market risk.
Kisan Vikas Patra (KVP) and Monthly Income Scheme
If you want your money to double over a fixed period of time, the KVP (Kisan Vikas Patra) is an excellent option with an interest rate of 7.5%. Conversely, if you need a fixed amount every month to run your household, the Post Office Monthly Income Scheme (POMIS) offers a 7.4% interest rate. The interest earned on the amount deposited in this scheme is credited directly to your savings account every month.
What is expected to happen on December 31st?
Market experts say the government is under pressure to raise interest rates due to the fluctuating inflation rate. However, PPF rates haven’t changed in a while, so investors are hoping the 7.1% threshold could be surpassed this time. The announcement on December 31, 2025, will provide clarity on how quickly your savings will grow in the new year.