Repo Rate Takes a Plunge, But Your Savings Don’t: PPF, NSC Rates Stand Tall

Updated: June 30, 2025 11:33

Image Source: The Economic Times

Amid expectations of a rate cut after the Reserve Bank of India (RBI) slashed the repo rate by a cumulative 1% in 2025, the government has decided to keep interest rates unchanged for all major small savings schemes—including Public Provident Fund (PPF), National Savings Certificate (NSC), Senior Citizen Savings Scheme (SCSS), and Sukanya Samriddhi Yojana (SSY)—for the July–September 2025 quarter.

“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),” the Finance Ministry stated in its circular.

Key Highlights:

No Change in Interest Rates:

Despite a total 1% repo rate cut by RBI (0.25% in February, 0.25% in April, 0.50% in June), the government has not reduced small savings rates for the sixth consecutive quarter.

Current Rates (July–September 2025):

PPF: 7.10%
NSC: 7.7%
SCSS: 8.2%
SSY: 8.2%
Kisan Vikas Patra: 7.5% (matures in 115 months)
Post Office Savings Deposit: 4%
Monthly Income Scheme: 7.4%
3-Year Term Deposit: 7.1%

Background:

The RBI’s repo rate cut had triggered speculation about a possible reduction in small savings rates, as these are often reviewed in line with broader interest rate trends and government security yields. However, the government has opted for stability, likely to protect the interests of pensioners, retirees, and middle-class savers.

Impact:

With bank fixed deposit rates already trending lower after the repo rate cut, small savings schemes remain attractive for risk-averse investors—at least for now.

Next Review:

The government will review rates again at the end of September for the October–December 2025 quarter.

For now, savers can breathe easy—small savings scheme rates remain untouched, offering a safe haven amid falling returns elsewhere.

Source: Economic Times, Moneycontrol, Upstox

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