Small Savings Scheme: Big news for Small Savings Schemes investors. The government announced on Wednesday that the interest rates for small savings schemes will stay the same for the October-December 2026 quarter. This means that popular schemes like PPF, NSC, KVP, Sukanya Samriddhi Yojana, and Senior Citizen Savings Scheme will maintain their current interest rates.
Investors were anticipating a possible revision in the rates for some schemes, but this did not occur. Interest rates had also remained unchanged for the July-September quarter. These schemes are favored for their low-risk nature, and the government assesses their interest rates every three months.
Current interest rates are as follows:
– PPF: 7.1%
– SCSS and Sukanya Samriddhi Yojana: 8.2%
– NSC: 7.7%
– Post Office Monthly Income Scheme: 7.4%
– Kisan Vikas Patra: 7.5%
Post Office Time Deposits offer varying rates:
– 6.9% for one year
– 7% for two years
– 7.1% for three years
– 7.5% for a 5-year deposit
– 6.7% for a 5-year Post Office Recurring Deposit
The government determines interest rates for small savings schemes based on G-Sec yields. Different schemes have different spreads, so changes in G-Sec yields can influence the rates of these schemes. However, the government has the final say and announces the rates every quarter.
The last adjustment in interest rates for small savings schemes occurred in the January-March quarter of 2024. In December 2023, the government had raised rates for some schemes, such as increasing the interest rate on a 3-year Post Office Time Deposit from 7% to 7.1% and on the Sukanya Samriddhi Yojana from 8% to 8.2%.
What will be the impact on investors?
The unchanged interest rates will directly impact those planning to make new investments in small savings schemes between October and December. They will receive returns based on the rates applicable in the previous quarter.
However, this decision will not immediately change the status of those who have already invested. Existing deposits will continue to earn interest according to the relevant scheme’s rules.
Interest rates on small savings schemes are reviewed every three months. Therefore, the rates for the January-March 2027 quarter may be revised during the next review. For now, investors will have to continue with the old interest rates for the October-December quarter.