PPF-SSY Interest Rate: Under the Small Saving Scheme, the Finance Ministry is to decide on the interest rate of PPF and Sukanya Samriddhi Yojana by the last date of June. After the repo rate cut by the RBI, it is expected that the interest rate may be cut this time.
PPF-SSY Interest Rate: If you also invest in PPF, Sukanya Samriddhi Yojana (SSY) or other small savings scheme, then this news is useful for you. The government is going to review the interest rate on small savings scheme Sukanya Samriddhi (SSY), PPF and NSC on Monday next week (30 June 2025). If there is any change in the interest rate by the government, then the new interest rate will be applicable from the July-September quarter of the financial year 2025-26.
There is hope of change in interest rate after reduction in repo rate
In the year 2025, the Finance Ministry has not made any change in the interest rate of most post office saving schemes so far. However, due to the rapid decline in bond yields and continuous reduction in repo rate by the Reserve Bank of India (RBI), a change in rates is expected this time. RBI has recently reduced the repo rate by 50 basis points to 5.5%. With the reduction in repo rate, the bond yield has also come down.
The effect of reduction in repo rate is also visible on bond yield.
As of 26 June 2025, the yield of 10-year government bond was 6.269%. It was at 6.779% at the beginning of the year. This simply means that it has fallen by 0.510%. It is clear from this that the effect of reduction in repo rate is also visible on bond yield. The decline is important because the interest rates on small savings schemes are indirectly linked to the yield of government bonds. According to data from investing.com, the average yield of 10-year government bond (G-sec) since March 24 till now has been 6.325%.
PPF interest rate may come down
If a ‘spread’ of 25 basis points is added to it, then if the interest rate of PPF is completely changed according to the formula, then it can fall to 6.575%. This is less than the current interest rate of 7.10%. According to this calculation, the interest rate of small saving scheme should be reduced, which will be in accordance with the fall in market rate. However, the final decision on this has to be taken by the government. The government can consider other major economic and political reasons before taking any such step.
Looking at the current situation, it is expected that the interest rate of small savings scheme may be cut for the second quarter (July-September) of the financial year 2025-26. However, the Finance Ministry will announce this on 30 June 2025. RBI has cut the repo rate thrice in the year 2025. Due to this it has come down from 6.5 percent to 5.5 percent. Due to these cuts, banks have reduced interest rates on their fixed deposits (FD).
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