Small savings rates for October to December are set this month

Rates on the small savings schemes, which include PPF, Sukanya Samriddhi Yojana, the National Savings Certificate, the Senior Citizen Savings Scheme and post office deposits, are notified by the Finance Ministry once a quarter. The notification for October to December is due at the end of September.

These rates are formally linked to government bond yields of comparable maturity, with a spread on top, though in practice the government has often held them steady rather than following the formula down. That is why they have repeatedly been more generous than a bank fixed deposit of the same tenure.

For anyone running a PPF account, the practical point is unglamorous but worth money: interest is calculated on the lowest balance between the 5th and the last day of each month. Depositing before the 5th earns you a full month of interest on that money; depositing on the 6th earns you nothing for that month. Over a fifteen-year account funded monthly, that timing habit alone is worth a meaningful sum.

Nothing about a quarterly reset requires you to act. Existing NSC and SCSS holdings keep the rate they were opened at for their full term. Only PPF and Sukanya balances move with the notified rate.