In India, very few parents start investing for their child’s future expenses, despite securing a better future for their childrens is paramount goal for them. Investing for the child's future should–especially for the girl child– could be a great move considering rising inflation. For those seeking to build a robust corpus by investing in risk-free investment schemes, government-backed savings such as the Public Provident Fund (PPF) and Sukanya Samriddhi Yojana (SSY) could be a great choice.
PPF vs SSY
Both schemes are government backed long term saving schemes, offering safe, guaranteed returns. However, they differ significantly in eligibility and yield. While a PPF account can be opened by any Indian citizen, an SSY account is exclusively designed for girl children up to 10 years of age. Additionally, SSY currently offers a higher interest rate of 8.2 per cent per annum, compared to 7.1 per cent per annum for PPF.
Scheme | Eligibility | Investment Tenure | Maturity Period | Premature Withdrawal Rules |
Sukanya Samriddhi Yojana (SSY) | Only for daughters up to 10 years of age. | Investments must be made for a total of 15 years. | The entire amount can be withdrawn after 21 years from the date of account opening. | Up to 50% of the total amount can be withdrawn for higher education when the daughter reaches 18 years of age. |
Public Provident Fund (PPF) | Any citizen of the country (for self or in the name of a daughter). | 15 years or more, as required. | The lock-in period is 15 years (which can be extended further). | Certain special rules and conditions apply for withdrawing money before completion of 15 years. |
SSY vs PPF Calculation
Average annual investment: Rs 60,000 (i.e., Rs 5,000 per month)
Daughter's age: Let's say 5 years
Scheme interest: 8.2 per cent
When did you open the account: Let's say you started the account in 2026
Total investment over 21 years: Rs 9 lakh
When will the account mature: 2047
Total funds deposited in 2047: Rs 2,771,0316
The calculation clearly shows that if you open an account for your 5-year-old daughter, when she turns 26, Rs 2,771,031 will be deposited in her name. If you wish, you can open an account for your daughter of any age below 10 years.
Also Read: October Rule Changes: From UPI MDR To FD Rates And LPG Subsidies, Here’s What’s Hitting Your Budget
PPF Calculation
Average annual investment: Rs 60,000 (i.e., Rs 5,000 per month)
Years of investment: 15 years
Interest earned on the scheme: 7.1 per cent
Total investment in 15 years: Rs 9 lakh
Amount accumulated in 15 years: Rs 1,627,284
The calculation clearly shows that if you invest the same amount in SSY as you do in PPF, you will get a higher return.
Which is better for you?
Considering the calculation, for parents targeting long-term financial goals specifically for a daughter, SSY provides superior returns due to its higher interest rate. On the other hand, PPF remains a highly flexible, risk-free investment choice suitable for broader family financial planning.