Small savings schemes 2026: Rates stay unchanged for January-March quarter

Government keeps post office and small savings interest rates steady for Q4 FY26

The government has decided to keep interest rates on small savings schemes unchanged for the January–March 2026 quarter, extending the status quo for another three months. The decision provides certainty to millions of households that rely on post office savings products for steady returns and capital protection, especially at a time when broader interest rate cues remain mixed.

 

The unchanged rates apply to all major small savings instruments, including Post Office Savings Account, Time Deposits, Recurring Deposits, Monthly Income Scheme, Public Provident Fund (PPF), National Savings Certificate (NSC), Kisan Vikas Patra (KVP), Senior Citizen Savings Scheme (SCSS) and the Sukanya Samriddhi Account (SSA).

 

Highest returns remain with SCSS and SSA

 

Among the available options, SCSS and SSA continue to offer the highest interest rates at 8.2 per cent. SCSS, designed for individuals aged 60 years and above, pays interest quarterly, making it attractive for retirees seeking regular income. The Sukanya Samriddhi Account, meant to encourage long-term savings for a girl child’s education and marriage, also carries an 8.2 per cent rate, reinforcing its appeal for parents planning long-term goals.

 

Tax-saving options hold steady

 

For investors focused on tax efficiency, NSC and PPF remain key choices. NSC offers a guaranteed return of 7.7 per cent with annual compounding and qualifies for deduction under Section 80C of the Income Tax Act. PPF continues at 7.1 per cent and retains its popularity due to its exempt–exempt–exempt (EEE) tax status, sovereign backing and long-term wealth creation potential.

 

Post office deposits vs bank fixed deposits

 

Post Office Time Deposits offer returns between 6.9 per cent and 7.5 per cent, depending on the tenure, with quarterly compounding. The five-year Time Deposit, which also qualifies for Section 80C benefits, offers 7.5 per cent, making it broadly comparable to bank fixed deposits but with a government guarantee. The Monthly Income Scheme, offering 7.4 per cent with monthly payouts, suits conservative investors looking for predictable cash flows.

 

Where other schemes stand?

 

Kisan Vikas Patra continues at 7.5 per cent, with a maturity period of 115 months, appealing to investors who prioritise capital safety and assured growth. The Post Office Savings Account remains at 4 per cent, mainly serving as a low-risk parking option rather than a return-generating investment.

 

What unchanged rates mean for savers?

 

The decision to hold rates steady gives savers clarity while planning investments for early 2026. However, with inflation concerns persisting, investors may need to balance safety with returns and align small savings schemes with their broader financial goals rather than relying on them as the sole investment avenue.