Deposit rate cuts tough for banks as govt retains small savings rates

Banks may find themselves in a bind when it comes to reducing interest rates on deposits, as the government has retained interest rates for a dozen small savings schemes, including the Public Provident Fund (PPF), Sukanya Samriddhi Yojana, and others, for the March quarter.

- SUBRATA PANDA

This comes as deposit mobilisation has been tough.

The government has said it will keep small savings rates unchanged for the January-March 2026 quarter.

The PPF will continue to offer 7.1 per cent, the Post Office Savings Account 4 per cent, Sukanya Samriddhi Yojana 8.2 per cent, and the threeyear term deposit 7.1 per cent. The National Savings Certificate (NSC) will remain at 7.7 per cent, the Kisan Vikas Patra (KVP) at 7.5 per cent with amaturity of 115 months, and the fiveyear Post Office Monthly Income Scheme at 7.4 per cent.