Returns on Post Office Schemes, PPF, & NSC Unchanged for July-Sep Quarter

Returns on Post Office Schemes, PPF, & NSC Unchanged for July-Sep Quarter

Good news for investors. Despite negative average yield seen in 10-year benchmark bonds in the last quarter, the government has decided to not change the interest rates on small savings schemes including Post Office Schemes, PPF, NSC, Sukanya Samridhi and Senior Citizen Scheme for July-September quarter of FY 2020-21.

The Department of Posts officially announced the rates of return on Small Saving Schemes for second quarter of this financial year today.

As the centre had already extended the date for investment in small saving schemes and life insurance products for claiming tax benefit till July 31, the tax payers can confidently tap the benefit of these schemes now.

In April-June Quarter, the government had slashed rates of small savings schemes by 70-140 bps, with PPF rates at record low of 7.1% from 7.8%, Senior Citizen Savings Scheme were hit by 120 bps, from 8.6% to 7.4%, NSCs stood at 6.8 % from 7.9%, Sukanya Smaridhi at 7.6% from 8.4 % and KVP saw 70 bps cut and 11 month maturity tenor extension.  The continuous negative yield of 10 year bond had indeed made investors nervous about the future of their savings before start of this quarter.

The rates of return for various Small Savings Schemes for the second quarter of financial year 2020-21 are as below:

Saving Schemes Interest Rate for July-September Quarter





Kisan Vikas Patra


(Lock-in of 124 months)

5-year RD


1-year time deposit


2-year time deposit


3-year time deposit


5-year Time deposits


Senior Citizens Savings Scheme



(Monthly Income Scheme)


Sukanya Samriddhi Scheme



This is one of the most positive decisions for boosting the sentiments of middle class investors. The move will bring back confidence of common households in fixed income schemes amidst current market uncertainties. Earlier, in the last quarter we saw drastic reduction in returns of these schemes. With stable deposits rates, government will also be able to borrow more from small savings schemes.


Also Read: Top 10 Reasons Why It is Important to Have a Savings Account

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