Centre keeps small savings interest unchanged for 7th quarter
What's the story
The Indian government has decided to keep the interest rates unchanged for major small savings schemes, including the Public Provident Fund (PPF) and National Savings Certificate (NSC). This is the seventh consecutive quarter that the decision has been made. The finance ministry issued a notification on Wednesday announcing that interest rates for Q4 FY26 (January 1-March 31, 2026) will remain unchanged from those notified in the previous quarter.
Rate stability
Sukanya Samriddhi Scheme offers the highest return at 8.2%
The decision affects all small savings schemes run mainly through post offices and select banks. The Sukanya Samriddhi Scheme will continue to offer the highest return among small savings products at 8.2%. Meanwhile, the interest rate on three-year term deposits has been retained at 7.1%. Popular schemes like PPF and post office savings deposits will continue to earn 7.1% and 4%, respectively.
Rate consistency
Other schemes maintain interest rates
The government has also kept rates unchanged for other instruments such as the Kisan Vikas Patra, which will offer 7.5% and mature in 115 months, and the National Savings Certificate, which will continue to earn 7.7% during the January-March quarter. The monthly income scheme will maintain an interest rate of 7.4%. These decisions come despite a reduction in the benchmark lending rate by 125 basis points over the past year.
Deficit reduction
Government's fiscal deficit target for FY26
The government plans to raise ₹3.43 lakh crore from the National Small Savings Fund in FY26, lower than the revised estimate of ₹4.12 lakh crore a year ago. The collections under these small savings schemes are used by the government to partly finance its fiscal deficit. For FY26, the Centre aims to bring down its fiscal deficit to 4.4% of gross domestic product from 4.8% a year earlier.