When it comes to safe and guaranteed savings, two government-backed schemes often stand out for investors:
1. Sukanya Samriddhi Yojana (SSY) – specifically for the girl child.
2. Public Provident Fund (PPF) – a long-term investment option for everyone.
Let’s compare these two to see where your ₹1 lakh investment will grow faster and which offers better returns.
1️⃣ Interest Rates and Returns
Scheme
Current Interest Rate (FY 2025-26)
Investment Tenure
Tax Benefits
SSY
8% per annum (compounded yearly)
21 years from account opening
100% tax-free under Section 10(11) of IT Act
PPF
7.1% per annum (compounded yearly)
15 years (extendable)
Contributions and interest tax-free (EET)
· SSY currently offers a slightly higher interest rate than PPF, meaning your corpus will grow faster if you invest the same amount.
· The interest in both schemes is compounded annually, which helps in building a substantial corpus over time.
2️⃣ Corpus Growth on ₹1 Lakh Investment
Assuming a single investment of ₹1 lakh:
· SSY (8% for 21 years) → Corpus: ~₹6.85 lakh
· PPF (7.1% for 15 years) → Corpus: ~₹2.8 lakh
If you are looking purely at fund growth and long-term returns, SSY clearly outperforms PPF due to a combination of higher interest and longer compounding period.
3️⃣ Key Differences
Feature
SSY
PPF
Purpose
For girl child’s education and marriage
Long-term savings & retirement planning
Tenure
21 years
15 years (extendable in blocks of 5 years)
Maximum Annual Investment
₹1.5 lakh
₹1.5 lakh
Tax Benefits
Fully tax-free
Fully tax-free
Early Withdrawal
Only in specific cases (marriage/education)
Partial withdrawals allowed after 5 years
4️⃣ Which One Should You Choose?
· SSY: Ideal if you want higher returns for your daughter’s future, with tax-free benefits and guaranteed government backing.
· PPF: Best for general long-term savings and retirement, with more flexibility in withdrawals.
Bottom line: For a ₹1 lakh investment, SSY will create a bigger fund first, thanks to a higher interest rate and longer maturity.
Disclaimer:
The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of any agency, organization, employer, or company. All information provided is for general informational purposes only. While every effort has been made to ensure accuracy, we make no representations or warranties of any kind, express or implied, about the completeness, reliability, or suitability of the information contained herein. Readers are advised to verify facts and seek professional advice where necessary. Any reliance placed on such information is strictly at the reader’s own risk.
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