Small Savings Schemes Interest Rates Remain Unchanged for Q3 FY 2025-26: What Central Government Employees Need to Know
The Government of India has announced that interest rates for all small savings schemes will remain unchanged for the third quarter of FY 2025-26 (October 1, 2025 to December 31, 2025). This marks the seventh consecutive quarter without any rate changes, providing stability for millions of investors including central government employees who rely on these schemes for long-term financial planning.
Official Government Notification
The Department of Economic Affairs, Ministry of Finance, issued an official memorandum dated September 30, 2025, confirming that interest rates for various small savings schemes will continue at the same levels as the previous quarter (July-September 2025). This decision has received approval from the competent authority and affects all major savings instruments operated through post offices and banks.
Complete Interest Rate Structure for October-December 2025
Post Office Deposit Schemes
- Post Office Savings Account: 4% per annum
- Time Deposits (Fixed Deposits):
- 1-Year: 6.9%
- 2-Year: 7.0%
- 3-Year: 7.1%
- 5-Year: 7.5%
- 5-Year Recurring Deposit: 6.7% per annum
Popular Long-Term Investment Schemes
- Public Provident Fund (PPF): 7.1% per annum, 15-year lock-in, tax benefits under Section 80C.
- National Savings Certificate (NSC): 7.7% per annum, 5-year tenure, Section 80C benefits.
- Kisan Vikas Patra (KVP): 7.5% per annum, doubles in 115 months.
Schemes for Specific Beneficiaries
- Senior Citizens Savings Scheme (SCSS): 8.2% per annum, quarterly interest payouts.
- Sukanya Samriddhi Yojana (SSY): 8.2% per annum, 21-year maturity, tax benefits.
- Post Office Monthly Income Scheme (POMIS): 7.4% per annum, monthly income option.
Why Interest Rates Remained Unchanged
The government’s decision to maintain rates stems from:
- Market Conditions: Despite RBI cutting repo rates by 100 bps in 2025, the government chose stability.
- G-Sec Yield Trends: 10-year G-Sec yield dropped from 6.779% to 6.483% in 2025, but rates stayed higher to protect small investors.
- Social Considerations: Protecting pensioners, retirees, and middle-class households dependent on these schemes.
Historical Context and Trends
This is the seventh consecutive quarter without changes, with the last revision in Jan-Mar 2024. The Shyamala Gopinath Committee (2010) recommended linking small savings to G-Sec yields plus 25 bps.
Strategic Implications for Central Government Employees
- Retirement Planning: PPF at 7.1% remains a strong retirement tool.
- Tax Planning: PPF, NSC, and 5-Year deposits help under Section 80C.
- Regular Income Needs: SCSS and POMIS serve retirees well.
- Child’s Future Planning: SSY’s 8.2% return secures girl child’s future.
Comparison with Market Alternatives
While banks have cut FD rates, small savings continue to offer competitive returns. This stability supports predictable financial planning for central government employees.
Looking Ahead
The government will review rates again for Jan-Mar 2026. For now, unchanged rates ensure stable growth of savings despite economic pressures.
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