Government savings schemes compared: PPF, SSY, NSC, KVP, SCSS, MIS
Written and reviewed by Omm · Last reviewed · General information, not investment advice
The government offers a handful of savings schemes. They are often listed together, but they are built for different purposes. This guide compares them by what matters when you choose: what the money is for, how long it is locked in, how the interest is paid, and how it is taxed. For today’s rates, see the rates table, which shows the quarter and notice they come from.
Side by side
| Scheme | Best suited to | Tax on interest | Lock-in | Interest |
|---|---|---|---|---|
| PPF | Long-term, tax-free saving | Tax-free | 15 years, extendable | Credited yearly, grows with the balance |
| Sukanya Samriddhi | A girl child’s future | Tax-free | 21 years | Credited yearly, grows with the balance |
| NSC | A lump sum in 5 years | Taxable | 5 years | Compounds yearly, paid at maturity |
| KVP | Money that doubles over a fixed period | Taxable | Fixed number of months | Compounds yearly, paid at maturity |
| SCSS | Regular income for seniors | Taxable | 5 years, extendable in 3-year blocks | Paid quarterly |
| Post Office MIS | Regular monthly income | Taxable | 5 years | Paid monthly |
| Post Office RD | Saving a fixed amount each month | Taxable | 5 years | Compounds quarterly |
| Post Office Time Deposit | A fixed deposit for 1 to 5 years | Taxable | 1, 2, 3 or 5 years | Calculated quarterly, paid yearly |
How to read the table
Start with the purpose, not the rate. A scheme that pays monthly (MIS, SCSS) is for income. One that pays at the end (NSC, KVP) is for a lump sum on a date. PPF and Sukanya Samriddhi are for long-term goals where the lock-in is the point.
Compare after tax. An 8% taxable rate is not the same as an 8% tax-free rate. If the interest is added to your income and taxed at 30%, the rate you keep is much lower. For people in the higher slabs the tax-free schemes can be worth more than a taxable scheme with a higher headline rate. For people with little taxable income the gap is smaller.
Check the lock-in against your plans. The long lock-ins in PPF and Sukanya Samriddhi are useful if you would otherwise dip into the money, and a problem if you might need it early. The 5-year schemes have limited early-exit options with penalties.
Mind the shared deduction limit. Under the Income-tax Act, 2025 (in force from 1 April 2026), the ₹1.5 lakh deduction under Section 123 (formerly 80C) is shared by PPF, Sukanya Samriddhi, the 5-year time deposit, NSC, ELSS and other eligible items, and it applies only if you pick the old tax regime. If you use the new regime, the deduction does not apply, and the comparison rests on rate and safety alone.
Remember the rate can change. For PPF and Sukanya Samriddhi, the rate is reviewed every quarter and your account earns whatever applies in each period. For the others, the rate when you open the account is generally the rate for the whole term. In every case, calculators that show a maturity value are using an assumption, and they say so.
What these schemes do not do
They are safe because they are backed by the Government of India, but safety has a cost. The returns are set by the government, not by markets, and over long periods a fixed rate may fail to keep ahead of inflation by much. If you want growth you have to take some market risk. See PPF vs mutual funds for that comparison.
Scheme rules and rates are set by the Government and can change. This guide is general information, not advice. Check the current rules with your bank or post office.