For investors placing funds in government savings schemes such as Sukanya Samriddhi Yojana (SSY), Public Provident Fund (PPF), or Senior Citizens Savings Scheme (SCSS), interest rates will remain unchanged over the next three months. The government has decided not to adjust the rates for small savings plans for the quarter covering October to December 2026. Thus, in the new quarter starting October 1st, investors will receive the same rates as in the previous quarter. This marks the ninth consecutive quarter where rates have remained the same.
The decision regarding interest rates for small savings plans was published by the Department of Economic Affairs of the Ministry of Finance on Wednesday. This directive will be effective for the quarter from October 1 to December 31, 2026. During this period, the rate for Sukanya Samriddhi Yojana will remain at 8.2% per annum. Similarly, the rate for the Senior Citizens Savings Scheme (SCSS) will be 8.2%. The National Savings Certificate (NSC) will yield 7.7% per annum, while the rates for Kisan Vikas Patra (KVP) and five-year Postal deposits will remain at 7.5%.
New rates for other small savings schemes include 7.4% per annum for Monthly Income Scheme (MIS). The rate for the Public Provident Fund (PPF) will remain at 7.1%, as will that for three-year Postal deposits. Additionally, twenty-year Postal deposits will yield 7%, and eleven-month deposits will yield 6.9%, while five-year Recurring Deposits (RD) will provide a return of 6.7%. The interest rate for the Postal savings account remains at 4%.
Assuming a monthly contribution of 5000 rupees into Sukanya Samriddhi Yojana (SSY) and using the current rate of 8.2%, the calculation is as follows: the monthly contribution is 5000 rupees, resulting in an annual contribution of 60,000 rupees. With a maturity period of 15 years, the total contribution amount will reach 900,000 rupees. At a redemption period of 21 years and the prevailing rate of 8.2%, the expected amount will be approximately 28.5 lakh rupees. This means that by accumulating 9 lakh rupees, one can receive a fund of approximately 28.5 lakh rupees, of which about 19.5 lakh rupees constitute interest. It is important to remember that the SSY rate is periodically set by the government, so the actual amount after 21 years cannot be guaranteed at this time. This calculation is based on the assumption that the 8.2% rate will remain throughout the entire term. The minimum annual contribution for the SSY account is 250 rupees, and the maximum is 1.5 lakh rupees; this account can be opened for girls up to 10 years old. This is a tax-advantaged government savings scheme.
If 5000 rupees are deposited monthly into the Public Provident Fund (PPF) while maintaining the current rate of 7.1% for the entire term, the total amount will be approximately 15.98 lakh rupees after about 15 years. Under this scenario, investing 9 lakh rupees over 15 years can build a fund worth about 16 lakh rupees. It should be noted that the government determines the PPF interest rate quarterly, so the actual amount after 15 years will depend on future rates. This forecast is made assuming the 7.1% rate is maintained throughout the fifteen-year period. PPF is also a tax-advantaged government savings scheme. To open a PPF account, a minimum annual contribution of 500 rupees and a maximum of 1.5 lakh rupees is required. A PPF account can only be opened for Indian citizens residing in India or on behalf of a minor.
The government reviews the interest rates for small savings plans quarterly. Factors considered include the yield on government bonds, current market interest rates, economic conditions, and other circumstances. After analysis, a decision is made on whether to change the rates for the next quarter or to maintain the existing values. In the recent review for the October-December quarter, the decision was made to keep all small savings plan rates unchanged.
Most small savings plans did not change their interest rates since the January-March 2023-24 financial quarter. However, in April 2024, the rate for the three-year Postal deposit was increased from 7% to 7.1%. During the same period, the rate for Sukanya Samriddhi Yojana was also raised from 8% to 8.2%. No changes have occurred in these two rates since then.
If your funds are invested in PPF, SCSS, NSC, Sukanya Samriddhi Yojana, or any other small Postal savings scheme, there will be no changes to the interest rate credited to your income during the October to December period. This means that in the current quarter, you will receive income according to the previously established rates. These programs are popular among investors who prefer relatively stable and fixed interest, avoiding market fluctuations. Instruments such as the Public Provident Fund and Sukanya Samriddhi Yojana offer tax benefits in accordance with current regulations.
