Investment Tips: Govt Schemes That Offer More Returns Than Popular Bank FDs
While most major banks have reduced interest rates on fixed deposits (FDs) and savings accounts, following a cumulative 100 basis point (1%) repo rate cut by the Reserve Bank of India since February, the Indian government has chosen to maintain interest rates on small savings schemes.
As of June 30, 2025, rates on schemes such as the Public Provident Fund (PPF), National Savings Certificate (NSC), and the Senior Citizen Savings Scheme (SCSS) remain unchanged and will apply for the September quarter of the 2025–26 financial year.
In this context, those considering FD investments are advised to compare rates offered by government small savings schemes with those of banks like State Bank of India (SBI), HDFC Bank, ICICI Bank, and Punjab National Bank (PNB), as many of these government-backed schemes are currently offering more attractive returns.
If you're looking to invest for a short-term period of five years, the following government schemes offer competitive returns:
By comparison, leading banks offer lower rates for five-year FDs:
Are Post Office Schemes And Bank FDs Safe?
Post office saving schemes are fully backed by the Government of India, making them a reliable option for risk-averse investors who want stable returns and principal protection.
Bank fixed deposits, while generally safe, come with a safeguard limit under the Deposit Insurance and Credit Guarantee Corporation (DICGC), which insures deposits up to Rs 5 lakh (inclusive of interest). Amounts exceeding this limit may not be guaranteed in the rare event of a bank collapse.
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