These government schemes offer higher interest rate than SBI, HDFC, PNB and ICICI Bank

Many banks have reduced fixed deposit and savings account interest rates after the Reserve Bank of India cut the repo rate by 100 basis points or 1% since February this year.

However, the government has kept the interest rate on small savings schemes like Public Provident Fund (PPF), National Savings Scheme (NSC), Senior Citizen Savings Scheme (SCSS) and others unchanged on June 30, 2025. The new rates will be applicable for the September quarter of FY 2025-26.

It makes more sense for investors to compare the returns from small savings plans with the fixed deposits of major banks like State Bank of India (SBI), HDFC Bank, ICICI Bank, and Punjab National Bank (PNB).


Has Govt cut PPF, NSC interest rate after RBI repo rate cut of 1%? Check the latest interest rate of post office schemes announced

Now, let us compare small savings schemes interest rates and FD rates of top banks such as SBI, HDFC Bank, ICICI Bank, and PNB.

Let’s evaluate the interest rates on 5-year term deposit, National Savings Certificate (NSC), and Post Office Time Deposit (POTD) alongside bank fixed deposits with a 5-year tenure.

The Post Office Time Deposit (POTD) (5 Y) offers an interest rate of 7.5% for all citizens, while the NSC provides a slightly higher rate of 7.7%. SCSS offers an interest rate of 8.2% for senior citizens. All these small savings schemes have a 5 year tenure.

State Bank of India (SBI) 5-year term deposit offers an interest rate of 6.3% for regular depositors and 6.8% for senior citizens. Among major banks, HDFC Bank provides 6.4% for general citizens and 6.9% for senior citizens, while ICICI Bank offers slightly higher rates at 6.6% and 7.1% respectively. PNB, on the other hand, offers 6.5% for general citizens and 7% for senior citizens.

Post Office schemes vs bank FD

Institution	Tenure	Regular Citizens (%)	Senior Citizens (%)
Post Office (POTD)	5 years	7.5	7.5
NSC	5 years	7.7	7.7
SBI	5 years	6.3	6.8
HDFC Bank	5 years	6.4	6.9
ICICI Bank	5 years	6.6	7.1
PNB	5 years	6.5	7
SCSS	5 years	NA	8.20%

Are Post Office schemes and FD safe?

Post Office schemes are backed by the government of India, because of the sovereign backing, these accounts are especially attractive to conservative savers who want to guard their principal while still earning predictable interest.
Bank fixed deposits, on the other hand, are also seen as secure investments, yet their coverage comes with a limit. Most of the banks are covered under the Deposit Insurance and Credit Guarantee Corporation (DICG). However, bank depositors should note that your amount is insured up to Rs 5 lakh (including interest). Any balance above that threshold may or may not be recovered in case the bank fails.