PPF vs SSY: Where ₹1.5 Lakh a Year Grows More for Your Daughter

If you have a daughter and you're trying to build a corpus for her education or marriage, you've almost certainly stared at two names on your bank's investment screen: PPF (Public Provident Fund) and SSY (Sukanya Samriddhi Yojana). Both are government-backed, both save you tax, and both are pitched as "the safe way to grow money for your child." So which one actually leaves more in your daughter's hands when it matters?

Here's the number that surprises most parents: at the small-savings rates notified for the July–September 2026 quarter, SSY is paying 8.2% per annum while PPF sits at 7.1% per annum. That gap of 110 basis points doesn't sound dramatic — but over 15+ years of compounding on ₹1.5 lakh a year, it translates into lakhs of extra rupees. On the other side, PPF gives you flexibility that SSY simply cannot, and for some families that flexibility is worth more than the higher rate.

In this PPF vs SSY comparison, I'll walk you through the exact maturity figures if you park ₹1.5 lakh a year in each, show you the year-by-year math, lay out where each scheme wins, and give you a clear decision framework so you can stop second-guessing and just start investing.

Key Takeaways

• SSY pays more: At Q2 FY2026-27 rates, SSY earns 8.2% vs PPF's 7.1% — a meaningful edge over long compounding periods.
• SSY only allows deposits for 15 years, but keeps earning interest until the account matures at 21 years from opening — a quiet superpower.
• Both are EEE (Exempt-Exempt-Exempt): contribution deduction under Section 80C, tax-free interest, tax-free maturity — but 80C only helps under the old tax regime.
• PPF is more flexible: it's not locked to your daughter's age, allows partial withdrawals from year 7, and can be extended indefinitely in 5-year blocks.
• Best strategy for many families: use both — SSY for the daughter-specific goal, PPF as your own flexible tax-free bucket.
• The annual cap of ₹1.5 lakh is combined across all 80C claims, so plan your total 80C usage before splitting money.

What are PPF and SSY, and who are they really for?

Both schemes belong to the government's small-savings basket, and their interest rates are reset every quarter by the Ministry of Finance. That means the rates I quote here — 8.2% for SSY and 7.1% for PPF — are the notified figures for the July–September 2026 quarter and can move up or down in future quarters.

Public Provident Fund (PPF)

PPF is a 15-year deposit scheme open to any resident Indian. You can open one in your own name or in the name of a minor (including your daughter). The minimum yearly deposit is ₹500 and the maximum is ₹1.5 lakh. After 15 years you can withdraw fully or extend in blocks of 5 years, with or without fresh contributions.

Sukanya Samriddhi Yojana (SSY)

SSY is designed exclusively for a girl child below 10 years of age. A parent or guardian opens the account, deposits between ₹250 and ₹1.5 lakh a year, and — this is the key part — you only deposit for 15 years, but the account continues to earn interest until it matures 21 years after opening. You can open a maximum of two SSY accounts (one per girl child, with an exception for twins/triplets).

Common mistake: Many parents open SSY thinking they must keep depositing for the full 21 years. You don't. Deposits stop at year 15; the balance then quietly compounds at the prevailing rate for another 6 years. That "free" compounding stretch is a big reason SSY's effective returns look so strong.

PPF vs SSY: the ₹1.5 lakh a year maturity comparison

Let's answer the question everyone actually came for. Suppose you invest the full ₹1.5 lakh every year, deposited at the start of each financial year so it earns interest for the whole year.

Worked example: ₹1.5 lakh/year in PPF at 7.1%

PPF interest is calculated on the lowest balance between the 5th and last day of each month, so depositing before 5th April each year maximises interest. If you invest ₹1.5 lakh at the start of every year for 15 years at a steady 7.1%:

• Total invested: ₹1,50,000 × 15 = ₹22,50,000
• Approximate maturity value after 15 years: ₹40.68 lakh
• Interest earned (tax-free): roughly ₹18.18 lakh

The math uses the future value of an annuity-due: each year's ₹1.5 lakh compounds at 7.1% for the remaining years. The first deposit compounds for 15 years, the last for just one. You can verify the exact figure by plugging your numbers into our PPF Calculator.

Worked example: ₹1.5 lakh/year in SSY at 8.2%

SSY is where it gets interesting because of two factors — a higher 8.2% rate and that extra 6 years of compounding with no fresh deposits.

• Deposits: ₹1,50,000 × 15 = ₹22,50,000 (same as PPF)
• Balance at end of year 15: approximately ₹43.9 lakh
• You then stop depositing. The balance compounds at 8.2% for 6 more years.
• Maturity value at year 21: approximately ₹70.5 lakh

Read that again. The same ₹22.5 lakh of your own money becomes about ₹70.5 lakh in SSY versus about ₹40.7 lakh in PPF — and the bulk of the SSY advantage comes from those 6 years of untouched compounding after year 15.

Side-by-side comparison table

Criteria	PPF (7.1%)	SSY (8.2%)
Annual deposit (max)	₹1.5 lakh	₹1.5 lakh
Deposit period	15 years	15 years
Maturity period	15 years (extendable)	21 years from opening
Total invested	₹22.5 lakh	₹22.5 lakh
Approx. maturity value	₹40.7 lakh	₹70.5 lakh
Tax status	EEE	EEE
Flexibility	High (partial withdrawals, loans)	Low (goal-locked)
Eligibility	Any resident Indian	Girl child under 10 only

Note: These figures assume rates stay constant, which they won't — small-savings rates are reset quarterly. But even under conservative rate assumptions, SSY's structural edge (higher rate + longer tail) usually holds.

Why does SSY beat PPF by so much on the same investment?

Three forces stack up in SSY's favour:

1. Higher headline rate: 8.2% vs 7.1% is a 110 bps difference. On a growing corpus, that compounds into a large gap.
2. The 6-year "dead-period" compounding: After year 15, SSY keeps earning 8.2% with zero new investment from you. Your ₹43.9 lakh grows to ₹70.5 lakh purely on interest.
3. Discipline enforced by the lock-in: Because SSY money can't be casually withdrawn, it actually stays invested — which is often the biggest determinant of whether families reach their goal.

To feel the power of that extra compounding tail, try our Compound Interest Calculator — set the same principal and watch how much difference two extra years of growth makes at the end, when the balance is largest.

Where does PPF win over SSY?

If SSY is mathematically better, why would anyone pick PPF for their daughter? Because money isn't only about the highest CAGR. PPF wins on flexibility and control:

• No age restriction: You can open PPF for a child of any age, or in your own name. SSY shuts the door once your daughter turns 10.
• Partial withdrawals: PPF allows partial withdrawals from the 7th year — useful if a medical or education emergency hits before maturity. SSY only allows a partial withdrawal (up to 50%) for higher education after the girl turns 18, and full closure for marriage after 18.
• Loan facility: PPF offers loans against the balance between years 3 and 6.
• Indefinite extension: After 15 years, PPF can be extended in 5-year blocks forever, letting it double as a tax-free retirement bucket.
• Portability of the goal: A PPF corpus isn't earmarked for one child; you can redirect it wherever your family's priorities land.

Pro tip: If your daughter is already 10 or older, SSY is off the table entirely — don't waste time debating it. In that case, PPF (plus equity for the long horizon) is your realistic tax-free route.

The tax angle: do PPF and SSY still save you tax in FY 2025-26?

Both schemes are EEE: your annual contribution qualifies for a deduction under Section 80C (within the ₹1.5 lakh limit), the interest is tax-free, and the maturity amount is tax-free. That's genuinely rare and valuable.

But here's the catch that trips up a lot of people in FY 2025-26: Section 80C deductions only apply under the old tax regime. Under the new regime (now the default), you don't get the 80C benefit at all. So if you've moved to the new regime for its lower slab rates, your PPF/SSY deposits still earn tax-free interest — but you lose the upfront deduction.

Before you decide how much to put in, run both regimes through our Income Tax Calculator to see which one leaves you better off. If the old regime wins for you thanks to 80C, HRA and home-loan interest, then maxing PPF/SSY makes even more sense. You can also cross-check your take-home with the Salary In-Hand Calculator and, if you're a tenant, the HRA Exemption Calculator.

How to actually open and run these accounts: a step-by-step walkthrough

Opening an SSY account

1. Confirm eligibility: your daughter must be under 10 years old.
2. Visit any post office or authorised bank (SBI, ICICI, HDFC, PNB, etc.).
3. Fill Form SSY-1 and submit the girl's birth certificate, plus your (guardian's) ID and address proof (Aadhaar, PAN).
4. Make an opening deposit of at least ₹250.
5. Set a recurring reminder to deposit before 5th April each year to maximise interest.
6. Deposit at least ₹250 every year for 15 years to keep the account "active" — a missed minimum triggers a ₹50 penalty and account revival paperwork.

Opening a PPF account

1. Choose a bank or post office (most banks let you open PPF online through net banking).
2. Submit Form A with PAN, Aadhaar, and a passport photo.
3. Fund the account — anywhere from ₹500 to ₹1.5 lakh in a financial year.
4. Deposit early in the year (before 5th April) for maximum monthly interest crediting.
5. Track the 15-year clock; decide at maturity whether to withdraw, extend with contributions, or extend without.

Once your daughter's plan is set, put your other money goals on the same footing with our Goal Planner Calculator, and browse the full set of free tools at AlarmDaddy's calculators.

Should you use PPF, SSY, or both — and where does equity fit?

Here's my honest, practitioner's view. The debt schemes above are excellent for capital protection and tax-free certainty, but their 7–8% returns roughly track long-term inflation plus a small real return. For a goal that's 15–21 years away, adding an equity SIP can materially outgrow both.

Consider a blended plan: use SSY to lock in the safe, tax-free daughter-specific portion, and run a parallel equity SIP for growth. A ₹5,000/month SIP for 18 years at a conservative 12% CAGR grows to roughly ₹38 lakh, of which only ₹10.8 lakh is your own money. Model your own figures with the SIP Calculator, and if you're weighing daily versus monthly contributions, this piece is worth a read: Daily SIP vs Monthly SIP: Does ₹50 a Day Beat ₹1,500 a Month?

Also don't ignore inflation eating into that shiny maturity number. ₹70 lakh in 21 years won't buy what ₹70 lakh buys today. Run the erosion through our Inflation Calculator to set a realistic target. And if you're comparing safe options broadly, the FD Calculator and NPS Calculator help round out the picture.

A practical split for a family maxing ₹1.5 lakh/year of 80C: ₹1 lakh into SSY for the daughter's locked goal + ₹50,000 into PPF for flexibility, while a separate equity SIP handles inflation-beating growth. Adjust to your risk appetite and cash-flow.

FAQ: PPF vs SSY for your daughter

Which gives higher returns, PPF or SSY?

SSY. At the July–September 2026 rates, SSY earns 8.2% versus PPF's 7.1%. Combined with SSY's longer 21-year maturity, the same ₹1.5 lakh/year yields a substantially larger corpus in SSY than PPF.

Can I invest ₹1.5 lakh in both PPF and SSY and claim ₹3 lakh under 80C?

No. The Section 80C deduction is capped at ₹1.5 lakh combined across all eligible instruments. You can deposit into both accounts, but your total 80C deduction can't exceed ₹1.5 lakh in a financial year.

What happens to SSY if I stop depositing after a few years?

If you deposit less than the ₹250 minimum in a year, the account becomes inactive and attracts a ₹50 penalty per defaulted year plus the minimum arrears to revive it. Once past year 15, you don't need to deposit at all — the balance keeps earning interest until year 21.

Is SSY better than a child mutual fund SIP?

They serve different purposes. SSY offers guaranteed, tax-free, capital-protected returns around 8.2%. An equity SIP can potentially deliver higher long-term returns (10–12%+) but with market risk. Most families use SSY for the safe core and an SIP for the growth engine.

Can I open SSY for two daughters?

Yes, you can open one SSY account per girl child, up to a maximum of two accounts. An exception is allowed for the birth of twins or triplets, permitting a third account.

Does the new tax regime affect PPF and SSY?

The interest and maturity remain fully tax-free under both regimes. However, the Section 80C deduction on contributions is only available under the old regime. Under the new (default) regime, you lose the upfront deduction but keep the tax-free growth.

When should I deposit to maximise interest?

For both PPF and SSY, deposit before the 5th of the month — ideally your full annual amount before 5th April — because interest is calculated on the balance available from the 5th to the end of each month.

The bottom line

Wrapping up this PPF vs SSY comparison: if your daughter is under 10 and your primary aim is a safe, tax-free corpus for her education or marriage, SSY is the clear mathematical winner — the higher 8.2% rate and the extra six years of untouched compounding turn ₹22.5 lakh of deposits into roughly ₹70 lakh. Choose PPF when you need flexibility, when your daughter is already 10 or older, or when you want a tax-free bucket you can also redirect toward your own retirement.

For most families the smartest move isn't either-or — it's using SSY for the locked goal, PPF for flexibility, and an equity SIP to beat inflation. Run your own numbers through the PPF Calculator and Goal Planner Calculator before you commit, and if you'd like to understand what we do, visit our about page or get in touch. Your daughter's 21-year-old self will thank you for starting early.

Image credit: President Cyril Ramaphosa addresses Team SA ahead of Investment Conference — GovernmentZA, via flickr (BY-ND 2.0), sourced from Openverse.