If you invest in post office savings schemes like PPF, NSC, SCSS, or Sukanya Samriddhi Yojana, then this is an important update for you.
The central government has decided not to change the interest rates on small savings schemes.
These rates are reviewed every three months, and many expected that the government might reduce them this time.
However, going against all expectations, there has been no change. This means from July 1, 2025, to September 30, 2025, the existing interest rates will continue.
This is now the sixth straight quarter that the government has kept small savings interest rates the same.
So, for the second quarter of the financial year 2025–26, the current rates will still apply. This update was given in a notification from the Finance Ministry.
Latest Interest Rates
The Public Provident Fund (PPF) will continue to earn 7.1% interest. The National Savings Certificate (NSC) still offers 7.7%.
The Senior Citizen Savings Scheme (SCSS) and Sukanya Samriddhi Yojana (SSY) will keep offering 8.2%. These are the same rates as during the April–June 2025 quarter.
Some other schemes have the following interest rates:
3-year term deposit: 7.1%
Post office savings account: 4%
Kisan Vikas Patra (matures in 115 months): 7.5%
Monthly Income Scheme: 7.4%
NSC: 7.7%
SCSS: 8.2%
RBI’s Repo Rate Cut
In 2025, the Reserve Bank of India has reduced the repo rate by 1% so far — 0.25% in February, another 0.25% in April, and 0.50% in June.
As a result, bond yields have also come down. For example, the 10-year government bond yield dropped from 6.779% on January 1, 2025, to 6.283% on June 25, 2025.
Due to this, there were expectations that the government might reduce interest rates on small savings schemes. But no such cut has been made.
How Interest Rates Are Fixed
The government reviews interest rates on post office schemes every quarter. These are mostly based on the suggestions of the Shyamala Gopinath Committee.
This committee says that interest rates on small savings should be 25 to 100 basis points higher than the yield of government bonds with similar maturity. This makes them attractive to investors.
However, the government does not always follow these suggestions strictly. Sometimes, it sets the rates independently, keeping in mind the public’s benefit.
