Small savings schemes offered through post offices and banks offer a range of investment plans for citizens of various age groups. These schemes – government-backed investment options – are designed to encourage investors to save money and develop financial security for self and their families.
Small savings schemes – tried-and-tested investment options for many years and some for decades – combine security, fixed returns, and in many cases, tax benefits.
Offered through post offices and designated banks, small savings schemes cater to almost every type of investor — from parents saving for a child’s future to senior citizens looking for regular income.
In 2025, the interest rates on these schemes range from about 7% to 8.2%, making them more attractive than many bank fixed deposits.
Let’s understand five of the best small savings schemes in 2025 — their features, benefits, returns, and how you can invest in them.
1. Public Provident Fund (PPF): Long-term, tax-free savings
The Public Provident Fund (PPF) has been a household name for decades. It’s a long-term, government-backed investment option designed to help individuals build a secure corpus over time.
The current interest rate on PPF is 7.1% per annum (as of FY 2025-26). The scheme has a 15-year lock-in period, but investors can extend it in blocks of five years after maturity. You can start with just Rs 500 a year and invest up to Rs 1.5 lakh annually.
One of the biggest advantages of PPF is that it offers triple tax exemption — the amount invested, the interest earned, and the maturity proceeds are all tax-free under Section 80C of the Income Tax Act.
You can open a PPF account at any post office or authorised bank branch. Deposits can be made in lump sum or monthly installments.
Because of its long tenure and tax-free status, PPF is ideal for long-term goals such as retirement planning or building a future corpus for children.
2. Sukanya Samriddhi Account (SSA): For your daughter’s secure future
If you have a girl child, the Sukanya Samriddhi Account (SSA) is one of the most rewarding schemes you can invest in. The scheme is specifically designed to encourage parents to save for their daughter’s education and marriage.
The current interest rate stands at a high 8.2% per annum, making it the most rewarding small savings scheme today. The account can be opened for a girl child below 10 years of age, and deposits can be made until she turns 21 (or earlier in case of marriage after 18).
You can invest between Rs 250 and Rs 1.5 lakh per year. Like PPF, this scheme also enjoys EEE (Exempt-Exempt-Exempt) status — the investment, interest, and maturity amount are all tax-free.
The account can be opened at a post office or authorised bank branch by the parent or legal guardian. The money can later be used for higher education or marriage expenses, providing both emotional and financial comfort to families.
3. National Savings Certificate (NSC): Fixed returns for 5 years
The National Savings Certificate (NSC) is another popular small savings scheme, offering a fixed interest rate of 7.7% per annum for a 5-year tenure. It’s a simple, no-frills option for investors who prefer guaranteed returns and moderate lock-in periods.
You can start investing with just Rs 1,000, and there’s no upper limit on the amount. The interest is compounded annually and paid at maturity. While the interest earned is taxable, it is also re-invested and qualifies for deduction under Section 80C until the certificate matures.
You can buy NSC from any post office by filling a simple form. It’s a solid choice for those looking for a 5-year guaranteed return plan with tax benefits and minimal paperwork.
4. Senior Citizen Savings Scheme (SCSS): For regular income after retirement
For senior citizens, the Senior Citizen Savings Scheme (SCSS) remains one of the most reliable income options in 2025. It offers a high interest rate of 8.2% per annum, which is among the best in the fixed-income space.
The tenure is 5 years, which can be extended for another 3 years. The scheme is open to individuals aged 60 and above (or those who have retired under certain conditions). You can invest from Rs 1,000 up to Rs 30 lakh.
Interest is paid every quarter — in April, July, October, and January — directly into your bank account. This makes SCSS a great source of regular income for retirees.
While the deposit amount qualifies for deduction under Section 80C, the interest earned is taxable. If annual interest crosses the prescribed limit (Rs 50,000 or more), tax is deducted at source (TDS).
You can open an SCSS account at any post office or designated bank branch by submitting age and identity proofs. With its assured quarterly income and safety, SCSS remains the go-to choice for retirees.
5. Kisan Vikas Patra (KVP): Guaranteed doubling of money
The Kisan Vikas Patra (KVP) is another long-term small savings option that promises to double your investment in around 115 months (9 years and 7 months). The current interest rate on KVP is 7.5% per annum.
You can start with just Rs 1,000, and there’s no upper limit on investment. The scheme is available at all post offices. Since the interest is compounded and paid at maturity, your money doubles at the declared rate.
KVP does not offer tax deductions under Section 80C, and the interest earned is taxable. However, it remains attractive for those who prefer a simple, no-risk investment with a fixed maturity value.
Because it’s backed by the government, KVP is a trusted tool for those who prefer certainty over high returns.
How and where to invest
All these small savings schemes are available through post offices across India, and many are also offered by select public and private sector banks. You can invest by visiting the branch, filling a form, and providing KYC documents (PAN, Aadhaar, and proof of address).
Some banks also allow online deposits and account access for PPF and SSA.
Interest rates for these schemes are revised every quarter by the government, based on market yields — so it’s always a good idea to check the latest rates before investing.
Which scheme should you choose?
-If you want long-term, tax-free savings, go for PPF.
-If you’re saving for a girl child’s future, Sukanya Samriddhi offers the highest return.
-For a 5-year goal, NSC provides guaranteed returns and tax benefits.
-If you’re a retiree, SCSS gives regular quarterly income and solid safety.
-If you want to double your money safely, KVP is a dependable choice.
Summing up…
In an uncertain market environment, small savings schemes continue to stand tall as one of the safest investment avenues for Indian households. With guaranteed returns, strong government backing, and attractive interest rates — many of them close to or above 8% — these schemes are tailor-made for investors seeking stability over risk.
Whether you’re planning for your child’s education, your retirement, or simply building an emergency corpus, small savings schemes offer peace of mind — and that, in itself, is the best kind of return.
