If you are investing in bank fixed deposits (FD) and are satisfied with up to 7% annual interest, then almost all government savings schemes of the post office can prove to be better for you. Recently, the government has announced the interest rates of small savings schemes for the July-September 2025 quarter, in which many schemes are still giving more than 7% return. These schemes are not only safe, but they also get the benefit of tax exemption.
Senior Citizens’ Savings Scheme
Senior Citizens’ Savings Scheme (SCSS) is the best option for investors who want regular income and are 60 years of age or above. The government is currently giving 8.2% annual interest on this scheme, which is deposited in the account every quarter. A maximum of Rs 30 lakh can be invested in it. Talking about tax exemption, investment in this scheme gives a rebate of up to Rs 1.5 lakh under Section 80C.
Sukanya Samriddhi Yojana
If your daughter is less than 10 years old, then investing in Sukanya Samriddhi Yojana (SSY) is a great option. This scheme also offers an interest rate of 8.2%. The biggest advantage of this scheme is that not only tax exemption is available on investment, but both interest and maturity amount are also completely tax free. The minimum annual investment is Rs 250 and the maximum is Rs 1.5 lakh.
For those seeking fixed returns: NSC
National Savings Certificate (NSC) is also a popular option among investors. Investment is made in this scheme for a period of 5 years and currently it is getting 7.7% annual compound interest. Interest is reinvested every year and the entire money is received together on maturity. It also offers tax exemption under 80C.
Kisan Vikas Patra
If your goal is to double your money in a certain time, then Kisan Vikas Patra (KVP) is the right choice. It is currently offering 7.5% annual interest and your amount doubles in about 115 months (9 years 7 months). Although this scheme does not provide tax exemption, it is a reliable option for long-term safe investment.
Public Provident Fund (PPF)
The interest rate on the PPF savings account was also kept unchanged at 7.1% per annum. This PPF rate has remained unchanged for many quarters now, giving stability to investors.
| Small Savings Scheme | Interest Rate (per annum) |
| Public Provident Fund (PPF) | 7.10% |
| National Savings Certificate (NSC) | 7.70% |
| Senior Citizen Savings Scheme (SCSS) | 8.20% |
| Sukanya Samriddhi Yojana | 8.20% |
| Post Office Monthly Income Scheme (POMIS) | 7.40% |
| Post Office Time Deposit (1-year) | 6.90% |
| Post Office Time Deposit (2-year) | 7.00% |
| Post Office Time Deposit (3-year) | 7.10% |
| Post Office Time Deposit (5-year) | 7.50% |
| Post Office Recurring Deposit (RD) | 6.70% |
Fixed deposit rates offered by large banks
| PUBLIC BANKS | |
| Bank | Interest rate |
| Bank of Baroda | 6.60% |
| Canara Bank | 6.60% |
| Punjab National Bank | 6.60% |
| Union Bank | 6.60% |
| State Bank of India | 6.45% |
| PRIVATE BANKS | |
| Bank | Interest rate |
| ICICI Bank | 6.40% |
| HDFC Bank | 6.60% |
| Kotak Mahindra Bank | 6.60% |
| Axis Bank | 6.60% |
| IndusInd Bank | 7.00% |
| Data as on respective banks’ website on 1 Aug 2025; Rates for 1-2 year FDs for deposit amounts below ₹1 crore; Compiled by BankBazaar.com | |
Why are these schemes better than bank FDs?
Today, most of the big government and private banks are giving a maximum of 7% annual interest on FDs to the general customers, that too for a limited time and limited amount. For example, the FD rates of banks like SBI and HDFC are between 6.45% to 6.60% for general customers, as per BankBazaar data. In comparison, many post office schemes offer higher returns.
Post office schemes are not only popular in rural areas, but people in cities also consider them a means of safe investment. These schemes are available at post offices across India as well as select bank branches. The application process is simple and most schemes allow a minimum investment of Rs 1,000.
Why choose post office schemes?
Government guarantee: Both your investment and the interest are guaranteed by the Government of India.
Tax exemption: Several schemes like SSY, SCSS and NSC offer tax savings under Section 80C.
Fixed interest rate: These schemes are not affected by market volatility.
Choices for every category: Be it senior citizens, parents, middle-class working professionals or retired employees—there are different schemes available for all.
Summing up….
If you want higher and safer returns on your investments, then these post office schemes can prove to be a better option than bank FDs. Especially when you want to save tax and have a long-term goal. Senior citizens, parents of daughters and those looking for safe investments should consider these schemes.