Small Savings Interest Rate Update: Will PPF and Sukanya Samriddhi Yojana Interest Rates Be Reduced?

If you also invest money in government schemes like Public Provident Fund (PPF) and Sukanya Samriddhi Yojana, then this news may be a little tension for you. The news is that the government may reduce the interest on these small savings schemes from the next financial year (FY26), i.e. from April to June.

Why can this happen?

Actually, our country’s bank, Reserve Bank of India (RBI), has recently reduced the repo rate. A lower repo rate means that banks will get loans cheaper, and its effect may be that the government may also reduce the interest rates of small savings schemes to encourage people to spend more. We have come to know this from government sources in the Business Standard newspaper.

Interest rates are fine right now!

Don’t panic! Till the month of March, no change has been made in the interest rates of small savings schemes. Still, 8.2% interest is being received on deposits in Sukanya Samriddhi Yojana. If you make a three-year fixed deposit, you will get 7.1% interest, which was available earlier. The interest rates on PPF and Post Office savings schemes are also the same as before – 7.1% on PPF and 4% on post office savings deposits. 7.5% interest is being given on investing money in Kisan Vikas Patra and 7.7% on National Savings Certificate (NSC). Those investing in Monthly Income Scheme are getting 7.4% interest.

When were the rates changed last time?

The government last made a slight change in the interest rates in the last three months (January to March) of the financial year 2023-24. The government tells about the interest rates of small savings schemes of post office and banks every three months.

What happened to the repo rate?

RBI has reduced the repo rate by 0.25% to 6.25% last Friday. Due to reduction in repo rate, it is expected that home and car loans will become cheaper and your monthly installment (EMI) may reduce slightly.