PPF, SCSS, Sukanya Samriddhi: Govt keeps interest rates for small savings schemes unchanged for July-Sept quarter

The Centre on Friday kept the interest rates of all small savings schemes unchanged for the July-September quarter of FY2025. In the last quarter too, the government kept the interest rates unchanged for the April-June quarter ahead of the Lok Sabha elections. 

In a notification, the Finance Ministry said: “The rates of interest on various Small Savings Schemes for the second quarter of FY 2024-25 starting from 1 July, 2024 and ending on 30* September, 2024 shal remain unchanged from those notified for the first quarter (1 April, 2024 ot 30* June, 2024) of FY 2024-25.” 

The Public Provident Fund (PPF), Sukanya Samriddhi Yojana (SSY), Mahila Samman Savings Certificate, Senior Citizen Savings Scheme (SCSS), and National Savings Certificate (NSC) are among the popular small savings schemes available to investors.

The last revision of interest rates was done in December 2023 for the January-March quarter of FY24. In the last revision, the Centre hiked the interest rates of some of the small savings schemes, such as Sukanya Samriddhi Scheme, 3-year Time Deposit, by up to 20 bps for the Q4 FY24. 

The PPF rates were kept unchanged for more than 3 years. It was last tweaked in April-June 2020, when it was slashed to 7.1 per cent from 7.9 per cent. 

For the Post Office Saving Account, the interest rate remains at 4 per cent compounded annually. The Senior Citizen Savings Scheme’s interest rate is 8.2 per cent (paid quarterly), while the Sukanya Samridhi Account’s interest rate will be 8.2 per cent for the next quarter.

The current rates are:

Scheme                         Interest Rate FOR Q2 FY25

Savings deposit              4.0%
One-year time deposit    6.9%
Two-year time deposit    7.0%
Three-year time deposit    7.1%
Five-year time deposit    7.5%
Five-year recurring deposit    6.7%
Senior Citizen Savings Scheme    8.2%
Monthly Income Account    7.4%
National Savings Certificate    7.7%
Public Provident Fund Scheme    7.1%
Kisan Vikas Patra    7.5% (115 months)
Sukanya Samriddhi Account Scheme    8.2%

How are interest rates calculated?

The government conducts regular assessments of the interest rates applied to small savings schemes. The methodology for determining these rates was put forth by the Shyamala Gopinath Committee. As per the suggestions made by the committee, the interest rates offered on different schemes should ideally range between 25 to 100 basis points above the yields on corresponding government bonds.

Tax benefits

Some of the small savings schemes come with tax benefits. As per Section 80C of the Income-tax Act of 1961, post office schemes that get tax benefits are NSC, SCSS, SSY, and PPF. 

The schemes that do not come with Section 80C benefit are as follows:

Kisan Vikas Patra (KVP)
Post Office Time deposits (except 5-year tenure)
Post Office Monthly Income Scheme
Mahila Samaan Savings Scheme
Post Office Recurring Deposits

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