This guide compares selected Indian bank Fixed Deposit (FD) rates with Government-backed Post Office small savings schemes. It covers interest rates, tenure, benefits, taxation and major risk factors.
Current Post Office rate period: July 1, 2026 to September 30, 2026.
Bank FD rates depend on the bank, deposit amount, tenure and whether the depositor is a general customer or senior citizen. Rates can change, so investors should verify the applicable rate on the date of booking the FD.
| Bank | Approx. / Selected Tenure | General Citizen | Senior Citizen |
|---|---|---|---|
| State Bank of India (SBI) | 1 Year – less than 2 Years | 6.25% | 6.75% |
| State Bank of India (SBI) | 2 Years – less than 3 Years | 6.45% | 6.95% |
| State Bank of India (SBI) | 3 Years – less than 5 Years | 6.30% | 6.80% |
| State Bank of India (SBI) | 5 Years – 10 Years | 6.05% | 7.05%* |
| ICICI Bank | 3 Years 1 Day – 5 Years | 6.50% | 7.10% |
| ICICI Bank | 5 Years 1 Day – 10 Years | 6.50% | 7.00% |
* SBI's 7.05% figure for senior citizens includes the applicable SBI We-care additional benefit shown in SBI's published retail term-deposit table.
The Government of India kept the small savings interest rates unchanged for the second quarter of FY 2026–27, covering July 1, 2026 to September 30, 2026.
| Scheme | Interest Rate | Tenure | Payment / Compounding |
|---|---|---|---|
| Post Office Savings Account | 4.00% | Open-ended | Annual |
| Post Office Time Deposit – 1 Year | 6.90% | 1 Year | Quarterly compounding |
| Post Office Time Deposit – 2 Years | 7.00% | 2 Years | Quarterly compounding |
| Post Office Time Deposit – 3 Years | 7.10% | 3 Years | Quarterly compounding |
| Post Office Time Deposit – 5 Years | 7.50% | 5 Years | Quarterly compounding |
| Post Office Recurring Deposit | 6.70% | 5 Years | Quarterly compounding |
| Monthly Income Scheme (MIS) | 7.40% | 5 Years | Monthly payout |
| National Savings Certificate (NSC) | 7.70% | 5 Years | Annual compounding |
| Kisan Vikas Patra (KVP) | 7.50% | 115 Months | Annual compounding |
| Public Provident Fund (PPF) | 7.10% | 15 Years | Annual |
| Senior Citizens Savings Scheme (SCSS) | 8.20% | 5 Years | Quarterly payout |
| Sukanya Samriddhi Yojana (SSY) | 8.20% | Long-term scheme | Annual |
| Goal | Scheme to Consider | Why |
|---|---|---|
| Long-term retirement savings | PPF | Long-term savings with tax benefits subject to applicable rules. |
| Girl child savings | Sukanya Samriddhi Yojana | Designed specifically for eligible girl-child savings. |
| Senior citizen income | SCSS | 8.20% rate with quarterly interest payout during the current quarter. |
| 5-year fixed savings | NSC | 5-year government small-savings instrument. |
| Regular monthly income | Post Office MIS | Interest is paid monthly. |
| Fixed deposit alternative | Post Office TD | Time deposits from 1 to 5 years with government-notified rates. |
Bank FDs generally provide predictable returns, but a bank deposit is different from a sovereign-backed Government small-savings instrument. Eligible bank deposits are covered by DICGC insurance subject to the applicable rules and limits.
Post Office small savings schemes are part of the Government of India's small savings programme. Their interest rates are notified by the Government and reviewed periodically.
Even when an investment provides a positive interest rate, inflation can reduce the purchasing power of the money over time. Therefore, the nominal interest rate should not be viewed as the same as the real return.
Some schemes have lock-in periods or restrictions on premature withdrawal. Investors should therefore check the withdrawal rules before investing.
Small savings rates are reviewed periodically by the Government. Future rates may be different from the current quarter's rates. Bank FD rates can also change for new deposits.
| Investment | Current Rate | Risk / Safety | Liquidity |
|---|---|---|---|
| SBI FD | Up to selected current tenure rates | Bank deposit + applicable DICGC protection | Generally available with premature-closure rules |
| ICICI Bank FD | Up to 6.50% general / 7.10% senior citizen | Bank deposit + applicable DICGC protection | Subject to bank premature-withdrawal rules |
| PPF | 7.10% | Government small-savings scheme | Long-term; withdrawal restrictions apply |
| NSC | 7.70% | Government small-savings scheme | 5-year maturity with applicable rules |
| SCSS | 8.20% | Government small-savings scheme | 5-year tenure with applicable rules |
| SSY | 8.20% | Government small-savings scheme | Long-term; eligibility and withdrawal rules apply |
| Post Office MIS | 7.40% | Government small-savings scheme | 5-year tenure |
Bank FDs are generally considered low-risk, but they are bank deposits rather than direct Government small-savings instruments. Eligible deposits have DICGC protection subject to the applicable ₹5 lakh insurance limit per depositor per bank.
For July–September 2026, the highest rates among the major listed small savings schemes are 8.20% for SCSS and Sukanya Samriddhi Yojana.
The PPF interest rate is 7.10% for the July–September 2026 quarter.
The National Savings Certificate currently carries an interest rate of 7.70% for July–September 2026.
The Post Office Monthly Income Scheme currently carries an interest rate of 7.40% for July–September 2026.
Yes. Government small-savings rates are reviewed and notified periodically, while bank FD rates can also be revised for new deposits. Always verify the rate before investing.
This article is for general educational and informational purposes only. It is not investment, tax or financial advice.
Interest rates, taxation, eligibility, deposit limits, withdrawal conditions and other rules can change. Investors should verify the latest terms with the concerned bank, India Post, Government of India or other official authority before making an investment decision.