No Changes This Quarter
The Ministry of Finance has decided to keep the interest rates on various small savings schemes, including the Public Provident Fund (PPF), National Savings Certificate (NSC), and Sukanya Samriddhi Yojana (SSY), unchanged for the quarter beginning October
1, 2026. This marks the tenth consecutive quarter that rates for most major schemes have been held steady, providing predictability for millions of small savers across India. The rates notified for the previous quarter (July to September 2026) will continue to apply until December 31, 2026. This decision provides certainty to retail investors who rely on these government-backed instruments for secure, predictable returns.
Public Provident Fund (PPF) Rate Holds at 7.1%
The interest rate for the Public Provident Fund (PPF), a popular long-term savings tool, remains at 7.1% per annum. This rate is compounded annually. PPF continues to be a favoured option for its Exempt-Exempt-Exempt (EEE) tax status, where the investment, interest earned, and maturity amount are all tax-free. Investors can deposit a minimum of ₹500 and a maximum of ₹1.5 lakh in a financial year. The stability of the PPF rate means investors can continue their savings strategy without needing to make adjustments, relying on its steady, tax-efficient growth over the 15-year lock-in period.
National Savings Certificate (NSC) Unchanged at 7.7%
For those invested in the National Savings Certificate (NSC), the interest rate will continue to be 7.7% for the October-December quarter. The NSC is a fixed-income instrument with a five-year maturity period. A key feature of the NSC is that while the interest is compounded annually, it is reinvested and paid out at maturity. The investment qualifies for a tax deduction under Section 80C of the Income Tax Act (under the old regime). The interest earned annually (except in the final year) is also deemed to be reinvested and is eligible for a tax deduction, making it an attractive option for tax-saving purposes. The rate is locked in at the time of purchase for the entire five-year tenure.
Sukanya Samriddhi Yojana (SSY) Remains a Top Performer
The Sukanya Samriddhi Yojana (SSY), a scheme designed for the financial security of a girl child, continues to offer one of the highest returns among small savings instruments at 8.2%. This rate has remained unchanged since it was last revised. SSY accounts also enjoy EEE tax status, making the returns completely tax-free. Parents or legal guardians can open an account for a girl child below the age of ten, with a maximum of two accounts per family. The scheme requires deposits for 15 years, and the account matures after 21 years from the date of opening. The high, tax-free interest rate makes it a powerful tool for building a substantial corpus for a daughter's education and future.
What Should Investors Do Now?
With the rates remaining stable, the primary takeaway for investors is one of continuity. There is no urgent need to alter your investment strategy in these schemes. The decision to hold rates steady comes despite movements in government bond yields, which form the basis for the rate-setting formula. For new investors, these schemes remain attractive due to their safety, sovereign guarantee, and competitive returns compared to many bank fixed deposits. Existing investors in floating-rate schemes like PPF and SSY can be assured of continued returns at the current level for the next three months. For those considering NSC, this is an opportunity to lock in a high rate of 7.7% for the next five years. Reviewing your portfolio should be tied to your financial goals rather than short-term rate announcements.
