The Ministry of Finance, Department of Economic Affairs, has officially declared that interest rates for all Small Savings Schemes will remain unchanged for the second quarter (Q2) of the financial year 2026–27, covering the period from July 1, 2026, to September 30, 2026.
This marks the ninth consecutive quarter where the central government has maintained rate stability across flagship postal deposit schemes, including the Public Provident Fund (PPF), Sukanya Samriddhi Yojana (SSY), Senior Citizen Savings Scheme (SCSS), and National Savings Certificates (NSC).
Despite fluctuations in benchmark government security yields and market liquidity, investors in government-backed post office schemes will continue to earn tax-efficient returns ranging from 4.0% to 8.2% per annum.
| Scheme Name | Q2 FY 2026–27 Interest Rate (July–Sept 2026) | Compounding / Payment Frequency |
| :--- | :--- | :--- |
| **Sukanya Samriddhi Yojana (SSY)** | **8.2%** | Compounded Annually |
| **Senior Citizen Savings Scheme (SCSS)** | **8.2%** | Paid Quarterly |
| **National Savings Certificate (NSC)** | **7.7%** | Compounded Annually |
| **Kisan Vikas Patra (KVP)** | **7.5%** (Matures in 115 months) | Compounded Annually |
| **Post Office Monthly Income Scheme (POMIS)** | **7.4%** | Paid Monthly |
| **Public Provident Fund (PPF)** | **7.1%** | Compounded Annually |
| **5-Year Post Office Time Deposit** | **7.5%** | Compounded Quarterly |
| **1-Year Post Office Time Deposit** | **6.9%** | Compounded Quarterly |
| **Post Office Savings Account** | **4.0%** | Compounded Annually |
Should You Keep Your Money in Small Savings Schemes?
For conservative investors and households looking for sovereign safety, the current rates remain highly competitive against commercial bank fixed deposits (FDs).
Tax-Free Yields Beat Bank FDs: While several leading public and private banks offer 3-year or 5-year fixed deposits around 6.5% to 7.0%, bank FD interest is fully taxable based on an individual's income tax bracket. In contrast, PPF retains its coveted Exempt-Exempt-Exempt (EEE) status at 7.1%, meaning the principal, interest, and maturity values are 100% tax-free.
Highest Returns for Senior Citizens & Girl Child Schemes: Both SSY and SCSS continue to offer the highest risk-free returns in the Indian market at 8.2%. Senior citizens requiring steady cash flow gain guaranteed quarterly payouts, while parents saving for a girl child receive strong long-term compounding.
Fixed Rate Lock-In: For schemes like NSC (7.7%) and Time Deposits, the interest rate active on the date of account opening is locked in for the entire maturity duration, protecting investors against potential future rate cuts.