Small-Savings-Scheme Interest Rates May Not Go Up For A While, Here's Why

The interest rates on all small-saving schemes will remain unchanged in the first quarter of 2025 as the Union government maintains the status quo.

For deposits made under the Sukanya Samriddhi Yojana, the interest rate has been retained at 8.2%, while savings under the Public Provident Fund will continue to draw interest at the rate of 7.1%. The interest rates on the small savings schemes are reviewed at the end of every quarter by the Department of Economic Affairs.

The government has left the interest rate for small saving schemes unchanged throughout the current financial year. The rates were last changed in the fourth quarter of fiscal 2024. Since then, they have been left unchanged.

Planners Take

Going forward, the chances for these interest offerings to be hiked are low. Investors should continue to believe and invest in the small savings scheme, according to Mohit Gang, co-founder of Moneyfront.

These are good long-term avenues of savings with sovereign guarantee and few of these offer tax advantage as well. Though the interest offering may not match the equity market returns, the tax advantage of these schemes sustains traction, Gang said.

The decision on interest rates assumes significance as the schemes, which include the SSY, Post Office Savings Scheme, PPF and the National Savings Certificate serve as key savings instruments for scores among the middle and lower-middle class.