Small Savings Interest Rate Remains Unchanged: Should You Invest in It Now?

The interest rates of Small Savings Schemes (SSS) remained unchanged for the quarter from 1st July, 2025, to September 30, 2025. The Department of Economic Affairs under the Ministry of Finance, issued the notification of keeping the rates unchanged on June 30, 2025, “The rates of interest on various Small Savings Schemes for the second quarter of FY 2025-26 starting from 1st July, 2025 and ending on 30th September, 2025 shall remain unchanged from those notified for the first quarter (1st April, 2025 to 30th June, 2025) of FY 2025-26.”

Experts suggest this is an opportunity for the risk-averse investors to use and book deposits at higher rates before the rates go down.

Says S. Ravi, former BSE chairman and founder, Ravi Rajan and company, “For individuals who prioritise capital preservation and predictable returns, the stability of these rates offers a degree of certainty in what can often be an unpredictable financial landscape.”

For those whose primary goal is to safeguard their principal and generate a steady, reliable income, the consistent returns offered by small savings schemes can be a compelling advantage. “This is particularly relevant for retirees and those living on fixed incomes, where the certainty of returns plays a crucial role in financial planning”, he suggests.

Notably, the government has kept the rates unchanged for quite a long time. It changed small savings interest rates last time in December 2023, for the then upcoming fourth quarter of the financial year 2023-24. At that time, the Ministry of Finance increased interest rates only for the ‘three-year time deposit’ from seven per cent to 7.1 per cent. 

How Are Interest Rates Revised For Small Savings Schemes?

The government reviews the rates every quarter and decides the rates based on the formula recommended by the Shyamala Gopinath Committee. According to which the interest rates of different schemes are set at around 25 to 100 basis points (bps) higher than the yields on the same maturity government bonds.

What Are The Latest FD Rates For Other Savings Schemes?

Schemes                                                        Interest Rates (%)

Savings Deposits                                  4.0

1-year time deposit                             6.9

2-year time deposit                             7.0

3-year time deposit                             7.1

5-year time deposit                             7.5

5-year recurring deposit                     6.7        

Senior Citizen Savings Scheme                8.2

Monthly Income Account Scheme          7.4

National Savings Certificate               7.7        

Public Provident Fund Scheme             7.1

Kisan Vikas Patra                                 7.5

Sukanya Samriddhi Account Scheme        8.2

Source: Ministry of Finance

Ravi emphasises, “The decision to invest in these schemes will ultimately depend on individual financial goals, risk tolerance, and the broader economic outlook. However, for those seeking security and a guaranteed income stream, the current unchanged rates could indeed present a timely opportunity to secure their financial future.”

Until now, the highest rates offered in small savings schemes are for the Senior Citizen Savings Scheme (SCSS) and for the Sukanya Samriddhi Scheme, offering 8.2 per cent interest, an attractive rate compared to other fixed income instruments.