Small Saving Scheme Interest Rate :Government Retains Interest Rates on PPF and Other Small Savings Schemes for Q2 FY 2024-25

Investors in small savings schemes like the Public Provident Fund (PPF) and Sukanya Samriddhi Yojana (SSY) have faced another disappointment as the government decided not to change the interest rates for the second quarter of the financial year 2024-25. The Finance Ministry issued a notification stating that the interest rates on small savings schemes for the period from July 1 to September 30, 2024, will remain the same as those for the first quarter.

Interest Rates Remain Unchanged

The notification confirmed that the interest rates for various small savings schemes will continue at their existing levels:

• Sukanya Samriddhi Yojana (SSY): 8.2%
• Three-year Fixed Deposit (FD): 7.1%
• Public Provident Fund (PPF): 7.1%
• Post Office Savings Scheme: 4%
• Kisan Vikas Patra (KVP): 7.5% with maturity in 115 months
• National Savings Certificate (NSC): 7.7%

Quarterly Review of Interest Rates

The government reviews and notifies the interest rates for small savings schemes operated by post offices and banks every quarter. Despite expectations in media reports that the government might increase the interest rates on small savings schemes to provide relief to the middle class before the budget, the rates have been maintained at the same level for the July-September quarter as they were in the April-June quarter.

PPF Interest Rate Unchanged for Four Years

The interest rate on PPF has not changed for the past four years. The last adjustment occurred in April-June 2020, during the COVID-19 pandemic, when the rate was reduced from 7.9% to 7.1%. For the last quarter of FY 2023-24, the government increased the interest rates on two schemes, raising the SSY rate from 8% to 8.2% and the three-year FD rate to 7.1%.

Post Office Schemes

For the September quarter, the Post Office will continue to offer 7.4% interest to investors in the Monthly Income Scheme. The government’s consistent approach to small savings scheme interest rates is aimed at providing stable returns to investors despite changing economic conditions.

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