No Change in Interest Rates of Small Savings Scheme in Q2FY26 | There is no change in interest rates of small savings scheme: rates have not changed since December-2023, 7.1% interest will continue on PPF

The government has not changed the interest rates of small savings schemes for July-September (Q2FY26). This is the 6th consecutive quarter, when the government has not changed the interest rates of these schemes. On Monday (June 30), the Finance Ministry issued a notification and informed about this.

Earlier, April-June (Q1fy26), January-March (Q4FY25), October-December (Q3Fy25), July-September (Q2FY25) and April-June (Q1Fy25), interest rates were not changed in the quarter.

That is, for the Q2Fy26 quarter, the interest rates on all small saving schemes including the Public Provident Fund (PPF) National Saving Certificate (NSC) and Kisan Vikas Patra (KVP) will be unchanged.

7.1% interest rate on public provident fund

Currently, 7.1% on Public Provident Fund (PPF) and 8.2% interest rate on Sukanya Samriddhi Yojana. The government also monitors the liquidity situation and inflation of the country before taking a decision on the interest rates of small savings schemes.

However, PPF reviews interest rates on small savings schemes including NSC and KVP every three months. Interest rates on small savings schemes are between 4% to 8.2%. The government last increased interest rates in December 2023.

Interest rates are reviewed every quarter

The interest rates of the small savings scheme are reviewed every quarter. The formula to fix their interest rates was given by the Shyamala Gopinath Committee. The committee had suggested that the interest rates of these schemes should be 0.25-1.00% higher than the same maturity bond yields.

This scheme is the major source of household saving

Small Saving Scheme is a major source of household saving in India and includes 12 instruments. In these schemes, depositors get interest on their money. The collection from all small savings schemes is deposited in the National Small Savings Fund (NSSF). Small saving schemes have emerged as a source of government deficit financeing.

Classification

Small saving instruments can be divided into three parts: