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PPF vs Sukanya Samriddhi: Which Is Better for Your Daughter?
If you're saving specifically for a daughter, Sukanya Samriddhi (SSY) usually wins — it pays a higher interest rate than PPF and is just as tax-free. If you want flexibility, or the account isn't tied to a girl child, PPF is the better all-rounder — anyone can open it, the lock-in is shorter, and it suits any long-term goal. Both are government-backed and fully tax-free, so this isn't about safety; it's about rate, lock-in and who the money is for. Many parents simply use both.
The key differences
- Interest rate — SSY currently pays more than PPF. Both rates are set by the government each quarter, and SSY has consistently sat a notch above PPF.
- Who can open it — SSY is only for a girl child below 10 years, one account per girl, up to two per family. PPF can be opened by any resident individual, including for yourself.
- Deposit period and maturity — SSY takes deposits for 15 years and matures 21 years after opening. PPF has a 15-year term, extendable in blocks of 5 years.
- Annual limits — both allow up to ₹1.5 lakh a year (minimum ₹250 for SSY, ₹500 for PPF), and each has its own separate limit.
- Tax — both are EEE: deposit under 80C, tax-free interest, tax-free maturity.
- Access — SSY allows a partial withdrawal of up to 50% after the girl turns 18, for higher education. PPF allows partial withdrawals from the seventh year and loans from the third.
What the numbers can look like
Say you invest the full ₹1.5 lakh a year. In Sukanya Samriddhi at the current 8.2%, deposits run for 15 years and the account keeps compounding until it matures at 21 years — reaching roughly ₹71.8 lakh, entirely tax-free. In PPF at 7.1% over its 15-year term, the same ₹1.5 lakh a year grows to about ₹40.7 lakh. The gap comes from two things: SSY's higher rate, and its longer compounding period. They aren't a perfect like-for-like — SSY simply runs longer — but for a young daughter, that longer horizon is a feature, not a bug.
So which should you choose?
If you have a daughter under 10 and the goal is her education or marriage, open a Sukanya account — the higher rate and long lock-in are ideal for a goal that's 10–20 years away. Keep PPF for your own long-term, tax-free corpus, or when you want the option to withdraw or borrow along the way. Because their ₹1.5 lakh limits are separate and both are EEE, a household with room to save can comfortably run both. Just remember the rates are reviewed quarterly, so check the current figure before you plan.