Small savings schemes: Will the Govt cut interest rates on PPF, NSC, Sukanya Samriddhi and other post office scheme?

Interest rates offered on Post Office small savings schemes, such as Public Provident Fund (PPF), National Savings Certificate (NSC), and others, remained unchanged as the Finance Ministry reviewed the rates on September 30, 2025. The unchanged rates will apply for the October-December 2025 quarter.

The development going to be particularly significant since the government has refrained from lowering the interest rates offered on such small savings schemes, including the Sukanya Samriddhi Account (SSA) and Senior Citizens Savings Scheme (SCSS) until now, despite three reductions in the repo rate—the rate at which banks borrow from the Reserve Bank of India (RBI)—so far this year.

The Reserve Bank of India has implemented three significant reductions to the repo rate this year. At the start of the year, the repo rate stood at 6.5%. However, the RBI reduced the repo rate by 25 basis points (bps) during its monetary policy meetings in February and April, followed by a further reduction of 50 bps in its review meeting in June. Consequently, the total rate reduction for this year has reached 1%.

Adding to this, government bond (G-Sec) yields, which form the benchmark for fixing small savings rates, have also declined. The 10-year G-Sec yield slipped from 6.78% on January 1, 2025, to 6.45% by September 24, 2025. According to the Shyamala Gopinath Committee’s formula, PPF rates should ideally track 10-year G-Sec yields with a 25-basis-point margin. On average, this works out to 6.66% for the past quarter, while the current PPF rate stands higher at 7.1%.

When were rates last changed?

The last revision came in January–March 2024, when the government raised the 3-year time deposit rate from 7% to 7.1% and hiked Sukanya Samriddhi Yojana (SSA) from 8% to 8.2%. Other schemes were left untouched.

Current rates (July–September 2025)

• Savings Deposit – 4%
• 1-year Time Deposit – 6.9%
• 2-year Time Deposit – 7%
• 3-year Time Deposit – 7.1%
• 5-year Time Deposit – 7.5%
• 5-year Recurring Deposit – 6.7%
• Senior Citizen Savings Scheme (SCSS) – 8.2%
• Monthly Income Scheme – 7.4%
• National Savings Certificate (NSC) – 7.7%
• Public Provident Fund (PPF) – 7.1%
• Kisan Vikas Patra (KVP) – 7.5% (maturity 115 months)
• Sukanya Samriddhi Account – 8.2%

What it means for investors

Crores of Indians—particularly senior citizens, pensioners, and middle-class households—depend on small savings schemes for stable returns. Any downward revision in rates directly hits their income. While the government is guided by the Gopinath Committee’s formula, it often balances market realities with the social need to protect savers.