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Fixed income and savings

PPF and Small Savings Schemes

Government-backed savings schemes for long-term, retirement and children's goals.

Read the guide PPF Calculator
Backed by
Government of India
Rates
Announced every quarter by the Ministry of Finance
Where
Post offices and authorised banks
Lock-in
5 to 21 years, depending on the scheme
Risk level: Low

Backed by the Government of India. Rates are reset every quarter, but most schemes fix your rate when you invest.

What is it?

Small savings schemes are deposit schemes run by the central government through post offices and banks. They offer some of the safest returns in India, and several come with tax benefits.

The interest rates are reviewed every quarter. For most schemes, such as NSC and SCSS, the rate on the day you invest applies for the whole term. For PPF and Sukanya Samriddhi, the current quarter's rate applies to your whole balance.

How it works

  1. Open the account at a post office or an authorised bank, often online.
  2. Deposit within each scheme's minimum and maximum limits.
  3. Interest is credited or compounded as each scheme specifies.
  4. Withdraw at maturity or as each scheme's partial-withdrawal and closure rules allow.

Types

Public Provident Fund (PPF)15 years, extendable in 5-year blocks. ₹500 to ₹1.5 lakh a year. Interest and maturity are tax-free; loans and partial withdrawals are allowed after set years.
National Savings Certificate (NSC)5-year certificate; interest compounds and is paid at maturity.
Senior Citizens' Savings Scheme (SCSS)For those 60 and above. Up to ₹30 lakh for 5 years, with interest paid every quarter.
Sukanya Samriddhi Yojana (SSY)For a girl child under 10. Up to ₹1.5 lakh a year; matures 21 years after opening.
Post Office Monthly Income SchemeMonthly interest for 5 years; up to ₹9 lakh single or ₹15 lakh joint.
Kisan Vikas Patra (KVP)Doubles your money over a fixed period set by the current rate.

Benefits and risks

Benefits

  • Sovereign backing: the safest option after cash.
  • PPF and SSY offer tax-free interest and maturity.
  • Rates are often higher than bank FDs of similar terms.
  • Ideal for retirement income (SCSS) and children's goals (SSY).

Risks and drawbacks

  • Long lock-ins with limited early access.
  • Annual deposit caps.
  • Rates can be cut in future quarters.
  • Several schemes' interest is taxable.

How it is taxed

  • PPF and SSY: deposits qualify for a deduction under the old tax regime; interest and maturity are tax-free.
  • NSC and 5-year Post Office Time Deposit: deposits qualify for a deduction under the old regime; interest is taxable.
  • SCSS: deposits qualify under the old regime; interest is taxable, with TDS above the threshold.
  • POMIS and KVP: no deduction; interest is taxable.
Rules for FY 2026-27, reviewed November 2026. Surcharge and cess apply on top. Tax rules change, so confirm before you file. Our tax team can help with your return.

Who it may suit

Conservative savers, retirees wanting regular income, parents saving for a daughter, and anyone wanting a safe, tax-efficient long-term base.

Getting started

  1. Pick the scheme that matches the goal and your eligibility.
  2. Check the current quarter's rate on the India Post or Ministry of Finance website.
  3. Open the account with your KYC documents and add a nominee.
  4. Set a reminder for annual minimum deposits so PPF and SSY accounts stay active.

Common questions

Can I have two PPF accounts?

No. One person can hold only one PPF account in their own name, though a parent can open one for a minor child within the same overall yearly limit.

What happens if I miss the PPF minimum deposit?

The account becomes discontinued. You can revive it by paying the minimum for each missed year plus a small penalty.

This guide is general education, not investment, tax or legal advice, and does not recommend any product. Investments in securities markets are subject to market risks; read all related documents carefully before investing.