The year 2025 is coming to an end and 2026 is approaching. Discussions have intensified regarding the government’s small savings schemes. The RBI has cut interest rates four times, and bank FD rates have fallen, but these schemes are still offering high returns. This is a good opportunity for farmers and retired individuals.
If you invest in NSC, KVP, or SSY, you can still earn good profits in 2026. G-Sec yields fluctuated, but the government kept the rates unchanged. The next update will come at the end of December.
No Rate Cut
The government has maintained the rates for July-September 2025 for January-March 2026. These schemes are better than bank FDs because they offer significant tax benefits. Rates are determined using the Shyamala Gopinath Committee formula, but the government has kept the rates high to encourage savings.
People have come to trust the Post Office scheme, which ensures their money is safe and free of interest. The government also guarantees returns.
Small Savings Scheme Interest Rates 2025 (October-December 2025)
For the third quarter of FY26, the government has maintained the same rates as the previous period (July-September 2025). You can see these:
- Sukanya Samriddhi Yojana and Senior Citizen Savings Scheme: 8.2%
- Public Provident Fund (PPF): 7.1%
- National Savings Certificate (NSC): 7.7%
- Kisan Vikas Patra (KVP): 7.5%
- Post Office Savings Deposit: 4%
| Scheme Name | Interest Rate (p.a.) | Compounding / Payout |
|---|---|---|
| Sukanya Samriddhi Yojana (SSY) | 8.2% | Annual Compounding |
| Senior Citizens Savings Scheme (SCSS) | 8.2% | Quarterly Payout |
| National Savings Certificate (NSC) | 7.7% | Annual Compounding |
| Kisan Vikas Patra (KVP) | 7.5% | Maturity in 115 Months |
| 5-Year Time Deposit (FD) | 7.5% | Quarterly Compounding |
| Monthly Income Scheme (MIS) | 7.4% | Monthly Payout |
| Public Provident Fund (PPF) | 7.1% | Annual Compounding |
| 3-Year Time Deposit | 7.1% | Quarterly Compounding |
| 2-Year Time Deposit | 7.0% | Quarterly Compounding |
| 1-Year Time Deposit | 6.9% | Quarterly Compounding |
| 5-Year Recurring Deposit (RD) | 6.7% | Quarterly Compounding |
| Savings Account | 4.0% | Annual Payout |
Special Tips for Farmer Brothers
Kisan Vikas Patra (KVP) is the best option for you. The amount doubles in 115 months at a rate of approximately 7.5%. Start with a minimum of ₹1,000, with no limit. You can easily purchase it at a post office or bank. Inflation in 2025 is around 5%, and these rates are higher than that.
All things considered, the best schemes for farmers are KVP, NSC, and Post Office Time Deposit.
SSY for Daughters’ Future
Sukanya Samriddhi Yojana is also a good option. It offers a rate of approximately 8.2%. You can open a deposit when your daughter is 10 years old. It matures after 21 years, making it good for education and marriage, and offers tax-free interest. 80C deduction up to ₹1.5 lakh is also available.
Example: Invest ₹1.5 lakh annually, and compounding can make it over ₹1 crore in 21 years.
SCSS, a favorite among retired individuals
8.2% rate, quarterly payments – receive money every 3 months. For those above 60 years, invest up to ₹30 lakh. It’s locked in for 5 years, but premature withdrawal is allowed in emergencies. Interest is taxable, but senior citizens receive tax exemption.
Tax-Saving Schemes
PPF: 7.1% rate, 15-year lock-in, tax-free. EEE status (investment, interest, and maturity all free).
NSC: 7.7% interest, two withdrawals possible in 5 years. 80C deduction.
5-Year FD: 7.5% interest, tax deduction available.
Monthly Income from MIS: Invest up to ₹9 lakh at 7.4% interest, monthly pension-like return.
But locked in for 5 years, only joint accounts allowed.
How much return will you receive? Calculation
The figures we provide are approximate and may be inaccurate. These figures are for illustration purposes only. They may be different in reality, so keep these in mind:
Invest 1 lakh in NSC:
- 1.46 lakh after 5 years at 7.7% compound interest.
- KVP: Doubles in 115 months – zero risk.
- 10-year SIP in SSY: Investing 1.5 lakh annually can make 30 lakh+.
- Use the online calculator on the post office website.
New Rules and Limits 2025-26
SCSS: Now up to 30 lakh (previously 15 lakh).
SSY: Girl child up to 10 years old, parents can open.
PPF: Minimum 500 rupees, maximum 1.5 lakh rupees annually.
KYC Required: Link to Aadhaar or PAN.
Digital KYC has become easier after COVID – through mobile only.
Why choose these schemes over bank FDs?
Safety: Government-backed, zero risk.
High rates: Banks charge less than 7%, these offer 8%+.
Tax benefits: Savings up to 46,800 under 80C.
Liquidity: Invest in RDs monthly, cash flow from MIS.
Stock market risk, mutual funds are volatile – these are fixed income.
Disclaimer: This article is for informational purposes only and not financial advice. Interest rates are subject to change. Check NSI.gov.in or IndiaPost.gov.in for accurate information. Source: Upstox News (December 22, 2025). Consult a tax expert before investing. Make your own decisions.
