The Department of Economic Affairs released the Q1 FY27 (April-June 2026) small savings interest rates on March 31, 2026. Every scheme stays at its current level for the sixth consecutive quarter.
The full Q1 FY27 rate table
- PPF (Public Provident Fund): 7.1%
- NSC (National Savings Certificate): 7.7%
- KVP (Kisan Vikas Patra): 7.5% (matures in 115 months / 9 years 7 months — money doubles)
- SCSS (Senior Citizens Savings Scheme): 8.2%
- SSY (Sukanya Samriddhi Yojana): 8.2%
- POMIS (Post Office Monthly Income Scheme): 7.4%
- POTD 5-year: 7.5%
- POTD 1-year: 6.9%
- POTD 2-year: 7.0%
- POTD 3-year: 7.1%
- 5-year RD (Recurring Deposit): 6.7%
- Savings Account: 4.0%
How does this compare to bank FDs?
Top bank 1-3 year FD rates (April 2026):
- SBI: 6.80% (general), 7.30% (senior)
- HDFC Bank: 7.00% (general), 7.50% (senior)
- ICICI Bank: 7.00% (general), 7.50% (senior)
- Axis Bank: 7.10% (general), 7.60% (senior)
Small savings beat bank FDs in 4 of 6 categories — especially SCSS at 8.2%, NSC at 7.7%, and SSY at 8.2%. The gap widens further when you add tax: most small savings products offer Section 80C deduction or tax-free interest.
Real return analysis (post-inflation)
March 2026 CPI: 4.1%. Real returns:
- PPF: 7.1% - 4.1% = +3.0% (tax-free)
- NSC: 7.7% - 4.1% = +3.6% (interest taxable but reinvested counts as 80C)
- SCSS: 8.2% - 4.1% = +4.1% (interest taxable)
- SSY: 8.2% - 4.1% = +4.1% (interest tax-free)
- KVP: 7.5% - 4.1% = +3.4% (interest taxable)
- POMIS: 7.4% - 4.1% = +3.3% (interest taxable)
Every scheme delivers a positive real return. PPF and SSY win on tax-adjusted basis because the interest is fully tax-free.
Who benefits from each scheme
SCSS — for senior citizens (60+): ₹30 lakh maximum investment. Interest paid quarterly. Quarterly payouts of ₹61,500 on a fully-funded ₹30 lakh deposit. Ideal for retirees needing income with capital safety.
SSY — for parents of girl children under 10: ₹250 minimum, ₹1.5 lakh maximum per year. Tax-free interest. Account matures when girl turns 21. ₹1.5 lakh/year × 15 years at 8.2% compounds to roughly ₹73 lakh by year 21.
PPF — for conservative long-term savers: ₹500 minimum, ₹1.5 lakh maximum per year. 15-year lock with extension option. Triple tax exemption (EEE): contribution under 80C, interest tax-free, maturity tax-free.
NSC — for 80C optimisers without long lock-in: ₹1,000 minimum, no maximum. 5-year tenure. Annual interest reinvested counts as fresh 80C deduction (years 1-4). Locks in current rate for 5 years.
KVP — for goal-based capital doubling: No 80C benefit, fully taxable interest. But 115-month maturity gives certainty: invest ₹1 lakh today, get ₹2 lakh in 9 years 7 months. Useful for child-education goal certainty.
POMIS — for monthly income seekers: ₹4.5 lakh single / ₹9 lakh joint maximum. Interest paid monthly. ₹9 lakh × 7.4% / 12 = ₹5,550/month. Combine with SCSS for retirees needing larger monthly cash flow.
Bottom line
Stable rates mean the small-savings sweep through the next three months is predictable. If your asset allocation has space for fixed income, lock the senior, child, or PPF categories now. Run scenarios in our PPF, NSC, KVP, SCSS, and SSY calculators before deciding the split.