These Government Saving Schemes Offer Higher Returns Than Bank FDs – Up to 7.7% Interest!

While several banks have slashed interest rates on Fixed Deposits (FDs) and savings accounts following the Reserve Bank of India’s 1% repo rate cut since February 2025, small savings schemes backed by the government have maintained stable and attractive returns up to 7.7%. If you’re looking for safe and rewarding investment options, these schemes may be a better bet than traditional FDs.

📉 FD Rates Fall, But Small Saving Scheme Rates Remain Steady

After the repo rate cut by the RBI, banks like SBI, HDFC, ICICI, and PNB have reduced FD and savings interest rates. However, the government has kept the interest rates unchanged for schemes like PPF, NSC, SCSS, and Post Office Term Deposits for the second quarter of FY 2025–26 (July–September). This makes them more rewarding than bank FDs right now.

💹 Compare Interest Rates: Bank FDs vs Small Saving Schemes

Here’s a quick comparison of the latest interest rates:

Institution / Scheme Tenure Regular Citizen (%) Senior Citizen (%)

Post Office Time Deposit (POTD)	5 Years	7.5	7.5
Public Provident Fund (PPF)	Min. 15 Years	7.1	7.1
National Savings Certificate (NSC)	5 Years	7.7	7.7
Senior Citizen Savings Scheme (SCSS)	5 Years	N/A	8.2
SBI Fixed Deposit	5 Years	6.3	6.8
PNB Fixed Deposit	5 Years	6.5	7.0

🏦 Are Post Office Investments Safe?

Yes, post office savings schemes are backed by the Government of India, making them a safe and reliable choice, especially for conservative investors. These schemes are ideal for those who wish to protect their capital while earning steady returns.

On the other hand, bank FDs are covered under the Deposit Insurance and Credit Guarantee Corporation (DICGC). This guarantees only up to ₹5 lakh (including interest) per depositor in case of bank failure. Any amount beyond that is not guaranteed.

📝 Conclusion

As banks continue to lower deposit rates, government-backed saving schemes offer a better alternative for investors looking for guaranteed, higher returns with safety. With interest rates up to 8.2%, schemes like NSC and SCSS stand out as lucrative options in 2025.