The Ministry of Finance has confirmed the interest rate that non-government provident, superannuation, and gratuity funds will earn for July-September 2026.
The Notified Rate: 7.1% for Q2 FY 2026-27
The Department of Economic Affairs, Ministry of Finance, has notified that deposits made under the Special Deposit Scheme (SDS) for Non-Government Provident, Superannuation and Gratuity Funds will continue to earn interest at 7.1% per annum for the quarter running from 1 July 2026 to 30 September 2026.
- Applicable period: 1 July 2026 – 30 September 2026 (Q2, FY 2026-27)
- Notified rate: 7.1% per annum
- Notification date: 3 July 2026
- Reference: File No. 5(3)-B(PD)/2023
- Signed by: Vyasan R., Joint Secretary, Department of Economic Affairs
The rate takes effect from 1 July 2026 and will remain applicable for the entire second quarter of FY 2026-27.
What the Special Deposit Scheme Is
The Special Deposit Scheme was originally introduced through a notification dated 30 June 1975. It gives Non-Government Provident Funds, Superannuation Funds, and Gratuity Funds a secure channel to park their surplus corpus with the Government of India, in return for a fixed, government-notified interest rate.
Organisations that use this route include private companies running their own approved PF trusts, as well as bodies such as the Employees' Provident Fund Organisation (EPFO), which invest a portion of their collections under the scheme rather than in market-linked instruments.
No Change From the Previous Quarter
Trustees and fund administrators tracking this rate closely will notice nothing new here — 7.1% is exactly where the rate stood in Q1 FY 2026-27 and in the immediately preceding quarters as well. For funds that plan cash flows and actuarial assumptions around this figure, that continuity is arguably the more useful headline than the number itself.
Why This Rate Matters for Trustees and Employers
For organisations managing approved provident, superannuation, or gratuity trusts, the SDS rate directly affects:
- Fund corpus growth - since a portion of trust surplus is typically parked in SDS deposits, this rate feeds directly into overall fund returns
- Actuarial valuations - gratuity and superannuation trustees use the notified rate as an input while assessing fund adequacy against employee benefit obligations
- Employer funding decisions - a stable, predictable government-backed rate helps employers plan top-up contributions where fund performance falls short of obligations
The continuation of the 7.1% rate offers exactly this kind of stability, letting trustees manage long-term employee benefit liabilities without having to re-model assumptions every quarter.
FAQs
What is the interest rate on Provident, Superannuation and Gratuity Funds for Q2 FY 2026-27?
The Ministry of Finance has notified an interest rate of 7.1% per annum on deposits under the Special Deposit Scheme (SDS) for Non-Government Provident, Superannuation and Gratuity Funds for the quarter from 1 July 2026 to 30 September 2026.
Has the rate changed from the previous quarter?
No, the rate remains unchanged at 7.1%. This is the same rate that applied in Q1 FY 2026-27 and in earlier quarters, continuing a trend of stability in the notified SDS rate.
Which funds does this notification apply to?
It applies to deposits made under the Special Deposit Scheme by Non-Government Provident Funds, Superannuation Funds, and Gratuity Funds, including trusts managed by private companies and bodies such as the EPFO that invest surplus corpus with the government under this scheme.
Who issued this notification and when?
The notification was issued by the Department of Economic Affairs, Ministry of Finance, on 3 July 2026, under File No. 5(3)-B(PD)/2023, and was signed by Vyasan R., Joint Secretary.
What is the Special Deposit Scheme?
The Special Deposit Scheme (SDS) was introduced through a notification dated 30 June 1975 to give Non-Government Provident, Superannuation and Gratuity Funds a secure avenue to invest their surplus with the Government of India while earning a notified rate of return, reviewed and announced every quarter.
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