The central government on Friday kept interest rates unchanged on all small savings schemes for the July-September quarter of fiscal 2025. In the previous quarter too, the government had kept interest rates unchanged for the April-June quarter ahead of the Lok Sabha elections.
“The interest rates of various small savings schemes for the second quarter of financial year 2024-25 (from July 1, 2024 to September 30, 2024) shall remain unchanged from the rates notified for the first quarter of financial year 2024-25 (from April 1, 2024 to June 30, 2024),” the finance ministry said in a notification.
Some of the popular small savings schemes available to investors include Public Savings Fund (PPF), Sukanya Samriddhi Yojana (SSY), Mahila Samman Savings Certificate, Senior Citizens Savings Scheme (SCSS) and National Savings Certificate (NSC).
The last interest rate revision was implemented in December 2023 for the January-March quarter of FY24. In the previous revision, the central government had increased interest rates on some small savings schemes, including the Sukanya Samriddhi Scheme, a three-year fixed deposit, by up to 20 basis points in the fourth quarter of FY24.
The PPF interest rate has remained unchanged for over three years and was last reduced to 7.1% from 7.9% in April-June 2020.
The interest rate on Post Office Savings Account will remain at 4% compounded per annum. The interest rate on Senior Citizen Savings Scheme will be 8.2% (paid quarterly) and the interest rate on Sukanya Samriddhi Account will be 8.2% for the next quarter.
The current prices are:
System interest rate for the second quarter of FY2013
Regular deposit 4.0%
1 year fixed term deposit 6.9%
2-year fixed term deposit 7.0%
3-year fixed term deposit 7.1%
5-year fixed term deposit 7.5%
5-year fixed term deposit 6.7%
Senior Citizen Savings Scheme 8.2%
Monthly Income Account 7.4%
National Savings Certificate 7.7%
Public Savings Fund Scheme 7.1%
Kisan Vikas Patra 7.5% (115 months)
Sukanya Samriddhi Account Scheme 8.2%
How is interest calculated?
The government periodically evaluates the interest rates applicable to small savings schemes. The methodology for determining these interest rates was suggested by the Shayamala Gopinath Committee. As per the committee's suggestions, the interest rates offered for various schemes should ideally be in the range of 25-100 basis points higher than the yields on the corresponding government securities.
Tax benefits
Some small savings schemes come with tax benefits. As per Section 80C of the Income Tax Act, 1961, the post office schemes which offer tax benefits are NSC, SCSS, SSY and PPF.
Schemes that do not come with Section 80C benefit are:
Kisan Vikas Patra (KVP)
Post office fixed term deposits (excluding 5-year fixed term deposits)
Post Office Monthly Revenue System
Mahila Saman Savings Scheme
Post office fixed term deposit