Government to decide on higher small-savings rates amid rising inflation and bond yields
The finance ministry will review small-savings interest rates on Wednesday for the Oct-Dec 2026 quarter, with a possible first hike since Dec 2024.
On Wednesday, the finance ministry will announce interest rates for small-savings schemes for the October-December 2026 quarter, the first potential change since December 2024 when the SSA and 3-year time deposit rates were lifted. Current rates already exceed 7%, with the SCSS and SSA at 8.2%, making them attractive compared with other low-risk options. Rising consumer-price inflation, now at 4.82%, and higher 10-year G-Sec yields above 7% may prompt a rate hike, as the Shyamala Gopinath Committee’s formula ties scheme rates to bond yields plus a spread.
However, the ministry is not obligated to follow the formula and has kept rates unchanged for nine quarters, citing strong small-savings inflows of about 41% year-on-year. Analysts suggest the decision will hinge on whether the government feels funding pressure or wants to maintain the schemes’ appeal.
