Public Provident Fund (PPF), National Savings Certificate (NSC) and Sukanya Samriddhi Scheme remained a fascination for small savings schemes such as the stock market. However, in the next financial year 2026, investors of these schemes may suffer a major setback. This is because the central bank RBI has cut the benchmark policy repo rate by 0.25 per cent, in such a situation, the Ministry of Finance can also cut the interest rates of small savings schemes. This information has been given by a government official to Moneycontrol. RBI’s Monkey Policy Committee (MPC) has reduced the repo rate from 6.50 per cent to 6.25 per cent on 7 February today.
New rates will continue before April
The senior official said that repo rate cuts will increase liquidity and now FD’s interest rates can be reduced. He said that small investors are getting more interest on small savings. In a way, they have indicated cuts in interest rates of small savings schemes. Their interest rates are to be reviewed and they will be announced before 1 April 2025. Earlier, the Finance Ministry had announced no change in interest rates on 31 December for the March 2025 quarter. There has been no change in the fourth quarter consecutive quarter. The central government releases it every government. Usually it is decided from the market yield of government securities with equal maturity, but for some time the interest rate on small savings schemes and the link between yields on government securities has weakened.
What are the interest rates of small savings schemes right now
Currently, 8.2 per cent annually on Sukanya Samriddhi Scheme, 7.1 per cent on three -year term deposits, 7.1 per cent on PPF, 7.1 per cent on Post Office Savings Deposits Schemes, 7.5 per cent on farmer development paper, 7.5 per cent on farmer development letter, 115 months, 115 months, National Savings Certificate-NSC is getting 7.7 percent on 7.7 per cent, Monthly Income Scheme 7.4 per cent and Senior Citizen Savings Scheme at 8.2 per cent.