The Department of Posts has announced the interest rates for small savings schemes for the period July to September 2020 (2nd Quarter of Financial Year 2020-2021) via a circular dated July 1, 2020.
The Government of India has kept the interest rates for small savings schemes unchanged for the second quarter of the current financial year. This means the investments in these schemes from 1st July to 30th September 2020 will carry the same rates of interest as they were from 1st April to 30th June 2020.
The Government has cut the interest rates on various post office savings schemes by anywhere between 70-140 basis points in the previous quarter. Therefore, the decision of keeping the interest rates unchanged will bring some relief to the fixed income investors.
Let us take a look at the interest rates applicable on post office savings schemes from July 1, 2020.
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Post Office Small Savings Schemes
PPF (Public Provident Fund), NSC, Recurring Deposit Account, MIS, SCSS, Sukanya Samriddhi Account, and POTD account are very popular schemes among the Indians. Millions of Indians used to invest their money in these popular saving instruments.
Note that the rates of interest remain the same till the date of maturity when you invest in these schemes like NSC, RD, SCSS, Term Deposits, KVP, and MIS. However, the rate of interest for the Public Provident Fund scheme will change every quarter.
Quarterly Schedule for change in Rates of Interest
The interest rates for post office small savings schemes are reviewed every quarter since April 1, 2016. In the below table, you will find the quarterly schedule for change in interest rates for all post office savings schemes.
| S. No. | Quarter for which interest rates would be effective | The date on which it will be notified |
| 1 | 1st Quarter (April to June) | 15th March |
| 2 | 2nd Quarter (July to September) | 15th June |
| 3 | 3rd Quarter (October to December) | 15th September |
| 4 | 4th Quarter (December to March) | 15th December |
As per the above-mentioned schedule, the interest rates for post office saving schemes are announced for the 2nd quarter of the financial year 2020-21 starting July 1, 2020, and ending on September 30, 2020. The government has decided to keep the interest rates for these schemes unchanged for the July-September quarter of FY 2020-21.
Latest Interest Rates for Small Savings Schemes
Here is a quick snapshot of the interest rates on post office savings schemes for the July to September quarter of the financial year 2020-21.
1. The Senior Citizens Savings Scheme (SCSS) will remain unchanged at 7.4%. Quarterly compounding and paid.
2. The girl child savings scheme Sukanya Samriddhi Account (SSA) Scheme will continue to fetch an interest rate of 7.6%. Annually compounding.
3. NSC (National Savings Certificate) will remain constant at 6.8%. Annually compounding.
4. The PPF (Public Provident Fund) scheme will also remain unchanged at 7.1%. Compounded annually.
5. KVP (Kisan Vikas Patra) will remain constant at 6.9%. Annually compounded. The scheme will now mature (Double your money) in 124 months.
6. The five-year Post Office Monthly Income Account will remain constant at 6.6%. Compounded monthly and paid.
7. Five years of Recurring Deposit (RD) Account will remain unchanged at 5.8%. Compounded quarterly.
8. Time Deposits of 1 to 5 years period will also offer the same interest rate of 5.5% to 6.7% p.a. Quarterly compounding. Interest rates for 1 to 3 year Time Deposit are 5.5% p.a. and 6.7% p.a. for 5 year Time deposit.
9. The rate of interest on Post Office Savings Account will also remain constant at 4%. Compounded annually.
Latest Interest Rates for Small Savings Schemes
In the following table, you will find the latest interest rates for post office savings schemes (July 1, 2020, to September 30, 2020).
| Scheme Name | Rate of Interest from 01/07/2020 to 30/09/2020 | Rate of Interest from 01/04/2020 to 30/06/2020 |
| Post Office Savings Account | 4% | 4% |
| 1 Year Time Deposit | 5.50% | 5.50% |
| 2 Years Time Deposit | 5.50% | 5.50% |
| 3 Years Time Deposit | 5.50% | 5.50% |
| 5 Years Time Deposit | 6.70% | 6.70% |
| 5 Years Recurring Deposit (RD) | 5.80% | 5.80% |
| 5 Years Monthly Income Account | 6.60% | 6.60% |
| Kisan Vikas Patra (KVP) | 6.90% | 6.90% |
| 5 Years National Savings Certificate (NSC) | 6.80% | 6.80% |
| Public Provident Fund (PPF) | 7.10% | 7.10% |
| Sukanya Samriddhi Account | 7.60% | 7.60% |
| Senior Citizens Savings Scheme (SCSS) | 7.40% | 7.40% |
You can also view the earlier quarter’s interest rate in my earlier posts:
- Latest Interest Rates for Small Saving Schemes April to June 2020
- Interest Rates for Small Saving Schemes January-March 2020
- Latest Interest Rates for Small Saving Schemes October to December 2019
- Interest Rates for Small Saving Schemes July-September 2019
- Latest Interest Rates for Small Saving Schemes April to June 2019
Final Thoughts
There are nine post office small savings schemes like PPF, RD, NSC, SCSS, SSA, POTD, KVP, Term Deposits, etc. The Government of India has kept the interest rates for small savings schemes unchanged for the second quarter (July to September) of the financial year 2020-21. This will bring some relief to the millions of investors who invest in these schemes.
As there is no change in interest rates for post office savings schemes, some schemes will remain a good investment option for fixed income investors. These small savings are government-backed schemes and offer the safety and security of your invested capital.
Related post: Post Office Time Deposit Account: Interest Rate, Features & Benefits
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