New Delhi – The Indian government has announced that interest rates for small savings schemes will remain unchanged for the third quarter of the financial year 2026-27, covering the period from October to December 2026. This decision extends the status quo for the ninth consecutive quarter, providing stability for investors in various government-backed savings instruments.
Key Scheme Rates for Q3 FY27
Investors in prominent small savings schemes will continue to earn the current rates. The Public Provident Fund (PPF) rate remains at 7.1%. Senior Citizens Savings Scheme (SCSS) and Sukanya Samriddhi Yojana (SSY) continue to offer the highest rates among the major schemes, both at 8.2%.
Other notable rates include:
- National Savings Certificate (NSC): 7.7%
- Kisan Vikas Patra (KVP): 7.5%
- 5-year Post Office Time Deposit: 7.5%
- Monthly Income Scheme (MIS): 7.4%
- 3-year Post Office Time Deposit: 7.1%
- 2-year Post Office Time Deposit: 7.0%
- 1-year Post Office Time Deposit: 6.9%
- 5-year Recurring Deposit: 6.7%
- Post Office Savings Account: 4.0%
Quarterly Review and Rate Determination
The Department of Economic Affairs, under the Ministry of Finance, conducts a quarterly review of these interest rates. This review considers several factors, including prevailing government bond yields, broader market interest rates, and the overall economic and geopolitical landscape. Despite this regular review mechanism, the rates have been kept constant for an extended period.
Last Rate Adjustments
The majority of small savings scheme rates have seen no change since the January-March quarter of FY 2023-24. The most recent adjustments occurred in April 2024, when the interest rate for the three-year Post Office Time Deposit was marginally increased from 7.0% to 7.1%. Additionally, the Sukanya Samriddhi Yojana rate was raised from 8.0% to 8.2% at that time.
Appeal to Conservative Investors
Small savings schemes continue to be a popular choice for conservative, long-term investors in India. These instruments offer predictable returns and are backed by the government, providing a sense of security against market volatility. Many schemes, such as the PPF and SSY, also offer attractive tax benefits under the Exempt-Exempt-Exempt (EEE) regime, where contributions, accumulated interest, and withdrawals are all exempt from tax, subject to specific rules.