This is Part 5 of Money Basics for Indians, our 12-part series on the everyday money systems every Indian should understand. New here? Start with Part 1: Bank Accounts and Deposit Insurance, or read the previous part, Part 4: Repo Rate, EMIs and FD Rates.
For generations, Indian families have trusted the post office with their savings. Small savings schemes are backed by the Government of India, offer fixed returns, and are available at post offices and many banks. The government reviews their interest rates every quarter.
Current rates (October to December 2026)
The government kept rates unchanged for the October to December 2026 quarter:
- Post Office Savings Account: 4.0%
- Time Deposits: 1 year 6.9%, 2 years 7.0%, 3 years 7.1%, 5 years 7.5%
- 5-year Recurring Deposit: 6.7%
- Monthly Income Scheme (MIS): 7.4%
- National Savings Certificate (NSC): 7.7%
- Kisan Vikas Patra (KVP): 7.5%, which doubles your money in about 115 months
- Public Provident Fund (PPF): 7.1%
- Sukanya Samriddhi Yojana (SSY): 8.2%
- Senior Citizens' Savings Scheme (SCSS): 8.2%
The popular schemes in brief
- PPF: A 15-year account, with deposits between ₹500 and ₹1.5 lakh a year. Interest and maturity are tax-free. Partial withdrawals are allowed after a few years. More in our guide to EPF, PPF and NPS.
- SSY: For a girl child under 10. Deposits of ₹250 to ₹1.5 lakh a year for 15 years; the account matures at 21 years. Interest is tax-free.
- SCSS: For people aged 60 and above (with some exceptions for retirees). Invest up to ₹30 lakh for five years and receive interest every quarter. Interest is taxable.
- MIS: Deposit up to ₹9 lakh singly or ₹15 lakh jointly and receive monthly interest for five years. Interest is taxable.
- NSC: A five-year certificate; interest compounds and is paid at maturity, and is taxable.
- KVP: A lump sum that doubles over the fixed period. Interest is taxable.
Tax: which regime matters
Deposits in PPF, SSY, NSC, SCSS and the 5-year time deposit can be claimed as deductions only under the old tax regime. Under the new regime there is no deduction, though PPF and SSY interest stays tax-free. See Part 6: Old vs New Tax Regime.
How safe are they?
These schemes are backed by the government itself, which makes them among the safest options in India. They are not covered by DICGC deposit insurance because they do not need to be. See Part 1: Bank Accounts and Deposit Insurance.
Things to keep in mind
- Rates for most schemes are locked when you invest. PPF and SSY rates change quarterly for your whole balance.
- Early exit usually carries a penalty or is not allowed.
- After tax and inflation, real returns on taxable schemes can be modest. Compare with FDs and debt funds.
This article is for general information and education only. It is not financial, tax or legal advice. Rules, rates and limits change often, so check official sources such as the RBI, the Income Tax Department or India Post, or speak to a qualified adviser, before acting.
Next in the series: Part 6: Old vs New Tax Regime.
