If you’re looking to grow your hard-earned money safely and earn better returns than bank fixed deposits (FDs), government small savings schemes are the right option. These schemes are available through post offices and banks and offer investors safe, fixed returns, and in many cases, tax benefits. Interest rates on these schemes range from 7% to 8.2% in 2025, making them more attractive than most bank FDs. Let’s explore the 5 best small savings schemes.
1. Public Provident Fund (PPF)
PPF has been a favorite option among investors for decades. It offers an annual interest rate of 7.1% and a lock-in period of 15 years, which can be extended in blocks of 5 years each. You can start with just ₹500 annually and invest up to a maximum of ₹1.5 lakh. Investments, interest, and maturity proceeds in PPF are all tax-free.
2. Sukanya Samriddhi Yojana (SSA)
The Sukanya Samriddhi Yojana offers a maximum interest rate of 8.2%. This scheme can be opened by parents for daughters under the age of 10. Annual investments range from ₹250 to ₹1.5 lakh. The investment, interest, and maturity amount are all tax-free.
3. National Savings Certificate (NSC)
NSC offers 7.7% interest for a 5-year term. Investors can invest with a minimum of ₹1,000. Interest is compounded annually and paid upon maturity. Investments also offer tax benefits.
4. Senior Citizen Savings Scheme (SCSS)
SCSS offers an annual interest rate of 8.2% for those aged 60 and above. Investments can range from ₹1,000 to ₹30 lakh. Interest is deposited directly into your bank account every quarter, ensuring regular income.
5. Kisan Vikas Patra (KVP)
Investments in Kisan Vikas Patra double in approximately 115 months (approximately 9 years and 7 months). The interest rate is 7.5%. This is a government-backed, safe, and easy investment option.
How and where to invest
All these schemes are available at post offices and select bank branches across India. To invest, you can visit a branch to fill out a form and submit your KYC documents. Some banks also offer online investment options for PPF and SSA.
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