Post office small savings schemes generally offer reliable and consistent long-term returns, making them the most popular among traditional and conservative investors. If you’re considering investing in small savings schemes, it’s important to understand which scheme offers the highest interest rate. Importantly, PPF and NSC are not currently among the highest-yielding schemes.
On September 30, 2025, the Ministry of Finance announced that the interest rates on several small savings schemes will remain unchanged for the third quarter (October-December) of the financial year 2025-26. According to the government notification, the Sukanya Samriddhi Yojana (SSY) offers the highest return of 8.2% among all small savings schemes, surpassing both PPF and NSC.
How much is the return on PPF and NSC
PPF and NSC interest rates have been kept stable for this quarter, but they are lower than those for SSY.
Public Provident Fund (PPF)
The interest rate on PPF accounts will remain at 7.1% for the October-December quarter of the financial year 2025-26. It is a popular option for tax savings, but the returns are now lower than those for SSY.
National Savings Certificate (NSC)
The interest rate on National Savings Certificate (NSC) will remain stable at 7.7% for the same quarter. NSC is also a good option for tax savings, but SSY has an edge in returns.
Sukanya Samriddhi Yojana (SSY)’s Amazing Features
Sukanya Samriddhi Yojana not only offers the highest interest rate (8.2%), but it also offers several excellent features to secure the future of daughters. The minimum annual deposit is ₹250, and the maximum deposit per financial year is ₹1.5 lakh. These accounts can be opened at post offices and all authorized public and private banks, such as the State Bank of India (SBI), HDFC Bank, ICICI Bank, etc. Withdrawals are permitted for higher education expenses. If the girl marries after the age of 18, the account can be closed prematurely. These accounts can be transferred between post offices and banks across India. The maturity period of this scheme is 21 years from the date of account opening.
Tax Benefits of Sukanya Samriddhi Yojana
The Sukanya Samriddhi Yojana is classified under the tax-free EEE (Exempt-Exempt-Exempt) category. This makes it extremely attractive for investment. All deposits made under this scheme are eligible for a tax deduction of up to ₹1.5 lakh under Section 80C of the Income Tax Act. Interest earned on the investment is also completely tax-free. All proceeds withdrawn upon maturity are also tax-free.
Parents or legal guardians of a girl child under the age of 10 can open this account on her behalf. This unique combination of tax-free, high returns, and security makes the Sukanya Samriddhi Yojana the best investment option for a girl’s future.