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Interest rates on several small savings schemes, such as the Senior Citizens' Savings Scheme (SCSS) and National Savings Certificate (NSC) , are currently at multi-year highs. For instance, SCSS is offering 8.2 per cent , a rate that's hard to find elsewhere in the fixed-income landscape today. But this window of attractive returns might be narrowing. The Reserve Bank of India (RBI) has already cut the repo rate in its last two monetary policy meetings, indicating a shift in the rate cycle. While these cuts haven't yet impacted small savings schemes, that may change soon. The Ministry of Finance revises rates every quarter, and the next revision is effective July 1, with another RBI Monetary policy due early next month. So, should investors act now and lock in these high rates, or opt for debt mutual funds instead? Fixed vs floating rates Not all small savings schemes offer fixed rates for the entire tenure. For those unaware, fixed rates stay the same till maturity, while floating rates can go up or down based on government reviews (usually every quarter). Therefore, here is a list of small savings schemes that offer a fixed rate. Which small saving schemes will let you lock in current interest rates? Scheme Interest rate (Apr-Jun 2025) Tenure Rate lock-in? Who can invest? SCSS 8.20% 5 years Yes Senior citizens (60+) NSC 7.70% 5 years Yes All individuals KVP 7.50%
This article was originally published on May 21, 2025.
