PPF Interest Rate: The government has declared the interest rates for small savings schemes for the first quarter (April-June) of the financial year 2025-26. This announcement indicates that there will be no alterations to the interest rates of these savings schemes. The newly established rates will be effective for the period from April to June 2025. As per the notification, interest on the Small Savings Scheme will remain unchanged starting April 1, 2025.
Despite recent reductions in the repo rate by the Reserve Bank of India, a decrease in interest rates for the savings schemes was anticipated. For the quarter commencing April 1, the interest rates will be 7.1% for the Public Provident Fund (PPF), 7.7% for the National Savings Certificate (NSC), 8.2% for the Senior Citizen Savings Scheme (SCSS), and 8.2% for the Sukanya Samriddhi Yojana (SSY). These small savings schemes are also referred to as post office schemes.
The notification specifies that these rates will apply for the first quarter of the financial year 2025-26, which runs from April 1, 2025, to June 30, 2025. The rates established for the fourth quarter of the financial year 2024-25 (January 1, 2025, to March 31, 2025) will continue to be in effect for the upcoming quarter.
Interest rates of the post office schemes
On March 28, 2025, the Department of Economic Affairs, under the Ministry of Finance, issued a circular concerning the interest rates of the post office schemes for the period from April 1, 2025, to June 30, 2025. The last adjustment to the interest rate of the Post Office Savings Scheme occurred in the final quarter of the financial year 2023-24, specifically between January and March 2024. During that period, the government raised the interest rates for the three-year fixed deposit and the Sukanya Samriddhi Yojana (SSY), increasing the rate for the three-year fixed deposit from 7% to 7.1% and for the Sukanya Samriddhi Yojana from 8% to 8.2%.
No alteration
There has been no alteration in the interest rates for the remaining schemes. Additionally, the interest rates for small savings schemes have remained unchanged since April 2024. The central government conducts a review and sets the interest rates for these schemes every three months. The interest rates for post office schemes are established based on the methodology proposed by the Shyamala Gopinath Committee. According to the committee’s recommendations, the interest rates for various small savings schemes should be set between 25 to 100 basis points (where 100 basis points equals 1%) above the yield of government bonds with a similar maturity. This approach aims to ensure that the interest rates for small savings schemes remain competitive and appealing to investors.