The Finance Ministry announced on Tuesday, June 30, 2026, that interest rates on all small savings schemes will remain unchanged for the July-September 2026 quarter. According to the Department of Economic Affairs notification, the rates will continue from the first quarter (April-June 2026) to the second quarter of FY 2026-27. This decision extends the status quo for another quarter, maintaining the same interest rates across all government-backed savings schemes. Interest rates on most small savings schemes have now remained unchanged for nine consecutive quarters, dating back to the January-March quarter of FY2023-24. The last revision came into effect in April 2024, when the government raised the interest rate on the three-year Post Office Time Deposit from 7% to 7.1% and increased the Sukanya Samriddhi Yojana rate from 8% to 8.2%. As per Zee News, this move provides continued stability for millions of investors relying on government-backed savings instruments.
The latest rate announcement confirms that Post Office Recurring Deposit continues at 6.7% for the July-September quarter, marking the second consecutive quarter of maintaining this rate. Among major small savings schemes, the Senior Citizen Savings Scheme (SCSS) and Sukanya Samriddhi Yojana (SSY) offer the highest interest rate of 8.2% per annum. The Public Provident Fund (PPF) continues at 7.1%, while the National Savings Certificate (NSC) offers 7.7%. The Post Office Monthly Income Scheme (POMIS) will continue to offer 7.4%, and the Kisan Vikas Patra (KVP) carries an interest rate of 7.5% with investment maturing in 115 months. Post Office Savings Account offers 4.0% per annum, while Post Office Time Deposits earn 6.9% for one-year, 7.0% for two-year, 7.1% for three-year, and 7.5% for five-year deposits. According to Zee News, investors in schemes such as PPF, SCSS, SSY, NSC, POMIS, KVP and various Post Office Time Deposits will continue to earn existing interest rates.
The Post Office Monthly Income Scheme (POMIS) interest rate has been maintained at 7.4% for the July-September quarter, continuing from the first quarter of FY 2026-27. As per the latest notification, an investment of ₹9 lakh in an individual POMIS account returns a monthly income of ₹5,500, while a joint account with ₹15 lakh investment generates ₹9,250 monthly income. The scheme allows individual investments up to ₹9 lakh and joint accounts up to ₹15 lakh. The POMIS account can be opened by a single adult or jointly by up to 3 adults, with the Post Office also allowing a minor above 10 years to open a POMIS account in his/her own name. A guardian can open this account on behalf of a minor or person of unsound mind. The scheme can only be opened at a post office and earns monthly income through lump sum deposits, making it particularly popular among senior citizens seeking guaranteed monthly interest income. The POMIS interest rate has remained unchanged since April 1, 2023, providing consistent returns for investors.
The Post Office Recurring Deposit scheme offers flexible investment options with no maximum limit on deposits and can be opened with as low as ₹100. The scheme provides advance deposits for up to 5 years and allows loans up to 50% of deposits at a simple interest of 2% over the applicable rate. The scheme differs from bank RDs in that it can only be closed prematurely after three years from account opening, while banks allow withdrawals at any time. The account matures after five years and can be extended for another five years. According to Zee News, small savings schemes remain a preferred choice for risk-averse investors because they provide stable and predictable returns backed by the Government of India.
The next review of small savings interest rates will be conducted by the ministry on September 30, 2026. In case of premature closure, the Post Office Savings Account interest rate will apply. Small savings schemes continue to remain a preferred investment avenue for conservative investors seeking stable and predictable returns without exposure to stock market volatility. Since these schemes are backed by the Government of India, they are considered among the safest fixed-income investment options with several schemes offering tax benefits under the Income Tax Act. Some schemes, such as the Public Provident Fund (PPF) and Sukanya Samriddhi Yojana (SSY), also qualify for the EEE (Exempt-Exempt-Exempt) tax regime, under which contributions, interest earned and withdrawals are all tax-free. The government reviews interest rates on small savings schemes every quarter using a formula linked to the yields on government securities, but revisions are not mandatory each quarter, and rates have largely remained unchanged in recent years.
