The Finance Ministry will decide the interest rates on small savings schemes today, September 30, 2025, for the October-December 2025 quarter. This includes popular schemes such as:
Public Provident Fund (PPF)
National Savings Certificate (NSC)
Sukanya Samriddhi Yojana (SSY)
Senior Citizen Savings Scheme (SCSS)
There are expectations that the interest rates may be reduced this time.
Why Interest Rates Could Fall
The Reserve Bank of India (RBI) has reduced the repo rate three times in 2025:
February: 0.25% cut
April: 0.25% cut
June: 0.50% cut
When the repo rate falls, banks lower interest rates on deposits and small savings schemes.
Government bond yields (G-Secs) have also fallen. The 10-year G-Sec yield dropped from 6.779% (Jan 1, 2025) to 6.483% (Sept 24, 2025).
Interest rates for small savings schemes are linked to G-Sec yields. For example, PPF rate = 10-year G-Sec yield + 0.25%. By this formula, PPF could drop to 6.66% from 7.1%.
When Were Rates Last Changed?
January-March 2024:
3-year time deposit: 7% → 7.1%
Sukanya Samriddhi Yojana: 8% → 8.2%
Other schemes remained unchanged.
Current Interest Rates (July-September 2025 Quarter)
Savings Deposit – 4%
1-year FD – 6.9%
2-year FD – 7%
3-year FD – 7.1%
5-year FD – 7.5%
5-year RD – 6.7%
Senior Citizen Savings Scheme – 8.2%
Monthly Income Scheme – 7.4%
NSC – 7.7%
PPF – 7.1%
Kisan Vikas Patra – 7.5% (maturity 115 months)
Sukanya Samriddhi Account – 8.2%
Impact on Investors
Millions of people, including senior citizens, pensioners, and middle-class families, rely on small savings schemes. If interest rates fall, their income could decrease.
However, the government may not strictly follow formulas while deciding the rates. The final decision will be announced today.
