Small Savings Rates May Dip for July–September 2025
This update will cover the Public Provident Fund (PPF), Senior Citizens’ Savings Scheme (SCSS), Sukanya Samriddhi Yojana (SSY), National Savings Certificate (NSC), Kisan Vikas Patra (KVP), Post Office FDs, RDs, and the Post Office Monthly Income Scheme (POMIS).
Government bond yields have dropped in recent weeks. The Reserve Bank of India has also reduced the repo rate four times.
Experts believe that this trend may push the Ministry to trim returns on some savings schemes.
Possible Scheme-wise Changes
- PPF: Currently at 7.1%. May drop to 6.9% due to lower bond yields.
- SCSS: Offers 8.2%. May stay unchanged to protect senior citizens.
- SSY: Could fall from 8% to 7.6%–7.8% to align with the formula.
- NSC: Likely to go down from 7.7% to around 7.5%.
- KVP: Set at 7.5% since 2023. May drop slightly.
- Post Office FDs/RDs: Rates across tenures may decrease by 0.1%–0.2%.
- POMIS: Offers 7.4%. Might face a small revision, if any.
How This Affects Investors
Rate cuts impact households that depend on fixed returns. Senior citizens and conservative investors are most affected.
To mitigate the effect, investors may consider laddering FDs or exploring balanced mutual funds.
Still, the government may avoid sharp cuts ahead of the festive season. SCSS and POMIS rates could remain stable.
Official Announcement Due
The Ministry of Finance is likely to release an official circular by the end of June 30.
Once announced, the new interest rates will apply from July 1 to September 30, 2025.
Conclusion
Interest rates on small savings could decline modestly this quarter. Stay informed to make smart investment decisions.