Small savings schemes interest rates 2025: What SSY, NSC, KVP & others investors should know going into 2026

In 2025, the central government maintained interest rates on small savings schemes. The next review for the January–March 2026 quarter is expected to be announced in the final week of December 2025.

The rates have remained steady rather than being cut. Under the Shyamala Gopinath Committee guidelines, these rates are supposed to track government bond (G-Sec) yields. While G-Sec yields fluctuated in 2025, the government chose to keep small savings rates higher than the formula-calculated values to encourage domestic savings.

Small savings schemes interest rates 2025 (as of October–December 2025)

For the third quarter of FY26, the government maintained the same set of rates as in the preceding period (July–September 2025):

• Sukanya Samriddhi Yojana & Senior Citizen Savings Scheme: 8.2%
• Public Provident Fund (PPF): 7.1%

• National Savings Certificate (NSC): 7.7%

• Kisan Vikas Patra (KVP): 7.5%

• Post Office Savings Deposit: 4%

Income tax implications

• Interest from PPF and Sukanya Samriddhi Yojana remains completely exempt from income tax.

• Investments in PPF, SSY, NSC, and 5-year Time Deposits are eligible for deductions up to ₹1.5 lakh under Section 80C.

• Interest earned on SCSS, MIS, KVP, and post office time deposits is taxable based on your income slab.

Bank deposit rates vs small savings schemes

Amid the Reserve Bank of India's (RBI ) four rate cuts in 2025 and resultant reductions in bank fixed deposit rates, small savings schemes have kept their appeal by maintaining higher rates. As a result, some savers favour them over conventional bank deposits for secure, fixed returns.

Long-term investors and retirees have benefited from the stability of interest rates on small savings instruments through 2025, particularly when other interest-earning options like bank FDs adapt to changes in monetary policy.