PPF, NSC, SSY Rate Cut 2025: Will Post Office Schemes Lose Interest?

Investors are keeping a close watch on Post Office savings schemes, including the Public Provident Fund (PPF), National Savings Certificate (NSC), Sukanya Samriddhi Yojana (SSY), and Senior Citizens’ Savings Scheme (SCSS), as the Finance Ministry prepares to review interest rates on September 30, 2025. Any revisions announced will be applicable for the October–December 2025 quarter.

RBI Rate Cuts Spark Speculation

The Reserve Bank of India (RBI) has reduced the repo rate three times in 2025, totaling a 1% cut. This includes two 25-basis-point reductions in February and April, followed by a 50-basis-point cut in June. While banks have already trimmed interest rates on fixed deposits and some high-interest FDs, Post Office savings schemes have so far retained their rates, raising speculation that a cut may now be considered.

Last Revisions Were in Early 2024

The most recent revision occurred in the January–March quarter of the 2023–24 financial year. At that time, the Sukanya Samriddhi Yojana rate was increased from 8% to 8.2%, and the three-year time deposit rate rose from 7% to 7.1%. All other schemes remained unchanged. Since then, no adjustments have been made.

Should You Invest Before the Review?

Experts advise that the timing of investment should depend on the nature of the scheme:

• Lock-in Schemes (PPF, NSC, SCSS): Once invested, the current rate is guaranteed for the tenure. Investors may benefit by locking in existing rates before a potential cut.

• Flexible Schemes (Recurring Deposits, Savings Accounts): Returns adjust periodically, so investors can stagger their investments or wait for the next review without significant impact.

While a rate cut is possible, the government will weigh monetary policy, bond yields, and the financial security needs of households before deciding. Investors are advised to monitor announcements closely and plan their investments accordingly.