Interest Rates Updated: Effective from 1 January 2026
Interest Rates in India as on 1 January 2026
With effect from 1 January 2026, the Government of India has kept interest rates unchanged for most popular small savings and post office schemes for the January–March 2026 quarter. The rates continue at the same levels as the October–December 2025 quarter, offering stability and certainty to savers, retirees, and long-term investors.
Below is a detailed overview of the prevailing interest rates across key savings instruments in India.
1. Small Savings & Post Office Schemes (Jan–Mar 2026)
Government-backed small savings schemes continue to offer fixed, risk-free returns, along with tax benefits under the Income Tax Act.
| Scheme | Interest Rate (% p.a.) | Key Features |
|---|---|---|
| Public Provident Fund (PPF) | 7.10% | Annual compounding; fully tax-free |
| National Savings Certificate (NSC) | 7.70% | 5-year maturity; eligible under Section 80C |
| Sukanya Samriddhi Yojana (SSY) | 8.20% | High return; tax-free; girl child scheme |
| Senior Citizen Savings Scheme (SCSS) | 8.20% | Quarterly interest payout |
| Kisan Vikas Patra (KVP) | 7.50% | Doubles in ~115 months |
| Post Office Savings Account | 4.00% | High liquidity |
| Time Deposit – 1 Year | 6.90% | Fixed tenure |
| Time Deposit – 2 Years | 7.00% | Fixed tenure |
| Time Deposit – 3 Years | 7.10% | Fixed tenure |
| Time Deposit – 5 Years | 7.50% | Long-term savings |
| Recurring Deposit – 5 Years | 6.70% | Monthly deposits |
| Monthly Income Scheme (MIS) | 7.40% | Regular monthly income |
📌 Note: All above rates remain unchanged for the Jan–Mar 2026 quarter as per the Finance Ministry’s notification.
2. Public Provident Fund (PPF)
-
Interest Rate: 7.10% per annum
-
Tenure: 15 years (extendable in 5-year blocks)
-
Compounding: Annually
-
Tax Benefits:
-
Contribution eligible under Section 80C
-
Interest and maturity proceeds are fully exempt
-
PPF continues to be one of India’s most trusted long-term, tax-efficient savings options.
3. Sukanya Samriddhi Yojana (SSY)
-
Interest Rate: 8.20% p.a.
-
Target Group: Girl child
-
Investment Limit: ₹250 to ₹1.5 lakh per year
-
Tax Treatment: EEE (Exempt–Exempt–Exempt)
SSY currently offers one of the highest risk-free returns among government schemes, making it ideal for long-term goals like education and marriage.
4. National Savings Certificate (NSC)
-
Interest Rate: 7.70% p.a.
-
Maturity: 5 years
-
Tax Benefit: Eligible under Section 80C
-
Interest Taxation: Taxable, payable at maturity
NSC remains popular for investors seeking assured returns with tax-saving benefits.
5. Senior Citizen Savings Scheme (SCSS)
-
Interest Rate: 8.20% p.a.
-
Eligibility: Individuals aged 60 years and above
-
Interest Payment: Quarterly
-
Tax Benefit: Eligible under Section 80C
SCSS is well-suited for retirees seeking stable and regular income.
6. Post Office Time Deposits & MIS
Post Office deposits function similarly to bank fixed deposits but carry sovereign guarantee.
-
1-Year TD: 6.90%
-
2-Year TD: 7.00%
-
3-Year TD: 7.10%
-
5-Year TD: 7.50%
-
5-Year RD: 6.70%
-
MIS: 7.40%
-
Savings Account: 4.00%
These options are useful for conservative investors and laddered investment strategies.
7. Bank Fixed Deposits (FDs)
Bank FD rates are not government-notified and differ based on bank policy and tenure.
Recent trends (late December 2025):
-
Leading banks such as SBI and HDFC Bank have marginally reduced FD rates on select tenures.
-
Typical general FD rates range between 6.40% to 7.00%.
-
Senior citizens usually receive ~0.50% extra.
-
Interest income is taxable, and TDS applies if annual interest exceeds ₹50,000.
📌 Investors should always check bank-specific FD rates before investing.
8. National Pension System (NPS)
Unlike fixed-interest schemes, NPS delivers market-linked returns.
-
Expected Long-Term Returns: ~8%–10% (variable)
-
Tax Benefits:
-
Up to ₹1.5 lakh under Section 80C
-
Additional ₹50,000 under Section 80CCD(1B)
-
NPS is suitable for retirement planning but should be chosen based on risk appetite and investment horizon.
Summary – Interest Rates as of 1 January 2026
| Scheme | Rate (% p.a.) | Key Advantage |
|---|---|---|
| PPF | 7.10% | Tax-free maturity |
| NSC | 7.70% | 80C benefit |
| SSY | 8.20% | Highest small savings rate |
| SCSS | 8.20% | Regular income |
| KVP | 7.50% | Capital doubling |
| Post Office TD (5 yr) | 7.50% | Government guarantee |
| MIS | 7.40% | Monthly income |
| Savings Account | 4.00% | Liquidity |
| Bank FDs | ~6.40–7.00% | Bank-specific |
| NPS | ~8–10% | Market-linked growth |
