The RBI raised its rate to 5.5%. It expects inflation of 5.8%.
India's first rate hike in 3 years 8 months takes the repo rate to 5.50%. The RBI's own forecast puts inflation at 5.8% for October 2026 to June 2027.
CapitalVia Research Desk ·
Data story5 October 2026
Your savings · April–August 2026
₹1.96 lakh crore flowed into government small savings in five months. That is 73% more than a year ago.
Bank fixed-deposit rates fell through 2025. Post-office rates did not. The Union Government’s own accounts show where savers went next.
Net inflow, April–August 2026
₹1.96 lakh crore
Same five months of 2025
₹1.14 lakh crore
That is, on an average day
₹1,282 crore
1 · The scale
The biggest April–August in at least nine years
Net inflow into small-savings deposits and certificates, April to August of each financial year, ₹ lakh crore
2018-190.53
2019-200.74
2020-210.78
2021-220.94
2022-230.90
2023-241.45
2024-251.04
2025-261.14
2026-271.96
- 2023-24 was the old high. That year’s Budget doubled the deposit cap on the Senior Citizens’ scheme (₹15 lakh to ₹30 lakh) and raised it on the Monthly Income scheme.
- 2026-27 is 36% above even that, and 73% above last year.
2 · The pattern
Every month beat the same month last year
Net inflow by month, ₹ thousand crore
20252026
April+61%
24.1
38.8
May+98%
18.5
36.6
June+38%
29.3
40.4
July+44%
26.3
38.0
August+176%
15.3
42.3
- August 2026 brought in ₹42,334 crore, the largest month in this series outside a March, when the financial year closes.
3 · The likely reason
A gap of more than a point, and it has not closed
Interest rates, % a year. Small-savings rates as listed by India Post and reported unchanged for October–December 2026
New bank FD average, August 20265.67
1-year post office deposit6.9
PPF7.1
Monthly Income scheme7.4
5-year post office deposit7.5
National Savings Certificate7.7
Senior Citizens’ scheme8.2
Jan 20256.56%→
Aug 20255.56%→
Aug 20265.67%
What a new bank FD paid, on average. Over the same months the small-savings rates stayed where they were.
Not like for like. These schemes carry lock-ins, deposit caps and age rules: the 8.2% scheme is mainly for people aged 60 and over, and PPF runs for 15 years. Interest on most of them is taxable, as FD interest is. PPF is counted separately in the accounts and is not part of the ₹1.96 lakh crore.
4 · The punchline
74%
The Budget expected these schemes to bring in ₹2.66 lakh crore across all of 2026-27. By the end of August, month five of twelve, ₹1.96 lakh crore had already arrived.
AprilFull-year Budget estimate: ₹2.66 lakh crore
5 · Why it matters
Your deposit is also the government’s borrowing
If you draw a salary: the average new bank FD and a government-backed scheme are now 1.2 to 2.5 points apart. In January 2025 a new FD paid 6.56%.
If you run a business: small savings are budgeted to fund ₹3.87 lakh crore of the Centre’s ₹16.96 lakh crore fiscal deficit this year. That is 23%, close to one rupee in four.
What we cannot see: the accounts give one net figure. They do not say which scheme, which city or which age group the money came from.
More from Insights
All storiesA new bank FD beats inflation by 0.85 points. Before tax.
New fixed deposits earned 5.67% in August against 4.82% inflation. The 0.85-point cushion was 2.92 points in January, and tax wipes it out from the 15% slab up.
India's factories earn ₹5.5 lakh of profit per employee. They pay ₹3.8 lakh.
India's 2.67 lakh registered factories employ 2.10 crore people. Each adds ₹12.83 lakh of value a year: ₹5.50 lakh is net profit, ₹3.82 lakh is pay.