PPF, NSC, SSA, SCSS & All Post Office Saving Scheme Interest Rates Up for Review Before RBI Repo Rate Decision

The Ministry of Finance is set to review interest rates for Post Office small savings schemes including the Public Provident Fund (PPF), National Savings Certificate (NSC), and others on September 30, 2025, ahead of the October-December quarter. The quarterly review comes amid a series of repo rate cuts by the Reserve Bank of India (RBI) this year and softening government bond yields.

Post Office Interest Rates Have Remained Unchanged Despite Repo Rate Cuts; Will It Revise in October?

Despite three repo rate cuts by the RBI in 2025, the government has so far kept interest rates unchanged for most small savings schemes, including the Sukanya Samriddhi Account (SSA) and the Senior Citizens Savings Scheme (SCSS). However, with recent macroeconomic indicators and declining yields on government securities, analysts believe that a rate cut could now be on the table.

The repo rate, which started at 6.50% in January, was reduced by 25 basis points (bps) each in February and April, followed by a sharper 50 bps cut in June, bringing the current repo rate down to 5.50%. As a result, commercial banks have responded by slashing interest rates on fixed deposits and withdrawing several high-interest FD options-moves that typically influence the trajectory of small savings scheme rates.

How Small Savings Schemes Interest Rates Are Determined

Interest rates for small savings schemes are theoretically benchmarked to the yields on comparable-maturity government securities (G-Secs), with a recommended spread. These benchmarks are based on the Shyamala Gopinath Committee's recommendations, which suggest that rates should be linked to secondary market yields on government securities with a 25 basis point spread added.

For example, the PPF rate, currently at 7.1%, is derived from the average yield of a 10-year G-sec plus a 25 bps spread. However, according to current G-sec trends, the calculated rate might actually be lower than what is being offered, indicating that the government has so far opted to maintain favorable rates for savers despite market signals.

As of January 1, 2025, the 10-year G-Sec yield stood at 6.779%. By September 24, it had fallen to 6.483%, a decline of approximately 30 basis points, even though there has been a mild recovery in the past quarter. This sustained decline suggests a lower interest rate environment and fuels expectations of a possible rate cut in the upcoming review.

Current Post Office Saving Scheme Interest Rates

The last revision to small savings scheme rates occurred in the January-March 2024 quarter, when the government increased the three-year time deposit rate from 7% to 7.1%, and raised the Sukanya Samriddhi Yojana (SSY) rate from 8% to 8.2%. Rates for most other schemes have remained steady since.

Here are the current Post Office Savings Scheme Interest Rates (per annum) as per the official website:

Savings Deposit - 4.0%

1-Year Time Deposit - 6.9%

2-Year Time Deposit - 7.0%

3-Year Time Deposit - 7.1%

5-Year Time Deposit - 7.5%

5-Year Recurring Deposit - 6.7%

Senior Citizens Savings Scheme (SCSS) - 8.2%

Monthly Income Account Scheme - 7.4%

National Savings Certificate (NSC) - 7.7%

Public Provident Fund (PPF) - 7.1%

Kisan Vikas Patra (Maturity in 115 months) - 7.5%

Sukanya Samriddhi Account (SSA) - 8.2%

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