PPF vs SSY: an honest, numbers-first comparison
Both are EEE, both are sovereign-backed — but at ₹1.5L/year over 21 years, SSY beats PPF by over ₹18 lakh. Here is exactly when each one wins.
PPF has been around since 1968. SSY arrived in 2015, explicitly for girl children. The comparison between them comes up constantly — and most of the advice is either vague (“both are good”) or pushed by someone selling a third option. This article does it differently: same assumptions, real rupees, and an honest answer about which one wins and when.
The short answer: SSY earns more, but is only available to families with a girl child below 10. PPF is more flexible — loans, unlimited extensions, universal eligibility. If your situation fits SSY, open it. If it does not, PPF at 7.1% EEE is still one of the best guaranteed options in India.
Side-by-side
| Feature | PPF (2026) | SSY (2026) |
|---|---|---|
| Interest rate | 7.1% p.a. (compounded annually) | 8.2% p.a. (compounded annually) |
| Who can invest | Any resident Indian individual | Girl child below 10; parent/guardian opens |
| Accounts per person | 1 (plus 1 per minor child you are guardian of) | Maximum 2 per family (one per girl child) |
| Minimum deposit/year | ₹500 | ₹250 |
| Maximum deposit/year | ₹1,50,000 | ₹1,50,000 |
| Deposit period | 15 years | 15 years from account opening |
| Maturity | 15 years (extendable in 5-year blocks) | 21 years from account opening |
| After maturity | 3 options: close, extend with deposits, extend without deposits | Close and withdraw only |
| Partial withdrawal | Year 7 onwards, up to 50% of balance | After girl turns 18, up to 50% of balance |
| Loans against balance | Yes: Years 3–6, up to 25% of balance | No |
| Premature closure | After 5 years; 1% interest penalty | After 5 years; only for death, illness, or marriage of girl |
| Tax on deposits | 80C deduction (up to ₹1.5L limit) | 80C deduction (up to ₹1.5L limit) |
| Tax on interest | Fully exempt | Fully exempt |
| Tax on maturity | Fully exempt (EEE) | Fully exempt (EEE) |
| Court attachment protection | Yes — balance cannot be attached | Not explicitly stated |
The number that matters: ₹1.5L/year over the full horizon
Maximum contribution — ₹1,50,000/year — deposited at the start of each financial year, for 15 years. The comparison at each scheme’s natural maturity point: 15 years for PPF, 21 years for SSY.
PPF at 7.1% — 15-year maturity
| Year | Annual deposit | Approx year-end balance |
|---|---|---|
| Year 1 | ₹1,50,000 | ₹1,60,650 |
| Year 5 | ₹1,50,000 | ₹8,96,000 |
| Year 10 | ₹1,50,000 | ₹22,12,000 |
| Year 15 (maturity) | ₹1,50,000 | ≈₹40,68,000 |
Total deposited: ₹22,50,000. Interest earned: ≈₹18,18,000.
SSY at 8.2% — 21-year maturity (15 deposit years + 6 years compounding with no deposits)
| Year | Annual deposit | Approx year-end balance |
|---|---|---|
| Year 1 | ₹1,50,000 | ₹1,62,300 |
| Year 5 | ₹1,50,000 | ₹9,66,000 |
| Year 10 | ₹1,50,000 | ₹25,70,000 |
| Year 15 | ₹1,50,000 | ₹50,96,000 |
| Years 16–21 | ₹0 | Compounds at 8.2% |
| Year 21 (maturity) | — | ≈₹80,00,000 |
Total deposited: ₹22,50,000. Interest earned: ≈₹57,50,000.
The gap at max contribution: SSY delivers ≈₹39 lakh more over the full 21-year horizon. Even if you extend PPF to 21 years with no further contributions (Option B under the post-maturity rules), the year-15 corpus of ≈₹40,68,000 grows to ≈₹61,40,000 by year 21 — still ₹18–19 lakh below SSY.
At lower contributions the absolute gap is smaller, but the percentage advantage of SSY’s 1.1% rate premium does not shrink. Every rupee benefits equally from the rate differential.
PPF’s three post-maturity options — SSY has none
This is PPF’s most underrated advantage. After the 15-year maturity, you have three choices (per §11 and §12 of the PPF Scheme 2019):
Option A: Close and withdraw. The entire balance is yours, tax-free. Simple exit.
Option B: Continue without making deposits. Your balance keeps earning 7.1% interest and you can withdraw any amount once per year. There is no cap on how much you withdraw — if you need ₹5 lakh one year and ₹1 lakh the next, that is allowed. Interest continues on the remaining balance. You can run this for an unlimited period.
Option C: Extend with deposits for 5-year blocks. Submit Form H within one year of maturity. Your ₹1.5L annual contribution continues, and you can still make one partial withdrawal per year — but the total lifetime withdrawals under this option are capped at 60% of the balance at the start of the block. You can extend again and again in 5-year blocks indefinitely.
SSY has no equivalent of Options B or C. The account matures at 21 years and you withdraw. Full stop.
For anyone building a retirement corpus — where the question is not just “how much” but “how do I draw it down” — PPF’s Option B is practically an annuity with no lock-in.
PPF’s loan facility — a feature SSY does not have
Between Years 3 and 6 (i.e., from the start of the 3rd financial year to before the end of the 6th), you can borrow up to 25% of the balance at the end of Year N-2. The interest rate is 1% per annum if repaid within 36 months, and 6% per annum thereafter.
This means PPF acts as a liquid backstop without requiring a withdrawal. You keep the full balance compounding, borrow against it at 1% for up to 3 years, and repay on your own schedule. SSY has no loan facility at any stage.
For households where a large emergency is plausible in the first 6 years of an investment — and most households qualify — PPF’s loan option has real value.
When SSY wins clearly
You have a daughter below 10. The math is unambiguous at every contribution level. The 1.1% rate premium compounds over 21 years into a meaningful advantage. At ₹1.5L/year, SSY produces ≈₹39 lakh more than a closed PPF account, and ≈₹18–19 lakh more than a PPF account extended to year 21 with no further contributions.
You can lock the money away until she turns 18. SSY’s partial withdrawal only opens after the girl turns 18 or passes Class 10, and only for education or marriage expenses. If your investment horizon aligns with those milestones, the lock-in is not a constraint — it is forced discipline that keeps the corpus intact.
You are maxing PPF already. Both schemes accept ₹1.5L/year under Section 80C. If you have a daughter and already contribute to PPF, running both simultaneously is entirely valid. A couple with one daughter can hold: PPF (one account each) + SSY — three EEE accounts at once.
When PPF wins or is the only option
No daughter below 10. SSY simply does not apply. PPF at 7.1% EEE remains one of the highest risk-free, tax-free returns available in India for a general saver.
You need the loan facility. Between Years 3 and 6, PPF lets you borrow 25% of the balance at 1% interest. If you are a business owner, freelancer, or anyone for whom a liquidity event in the first several years is plausible, this backstop is worth something.
You want post-maturity flexibility. PPF’s Option B — continue earning 7.1% with unlimited annual withdrawals — is a retirement drawdown structure built into the scheme. SSY mandates a single exit at 21 years.
The horizon is shorter than 21 years. If you open SSY for a 9-year-old, maturity is at 30. If 24 (PPF’s 15-year mark) is the more relevant planning horizon, PPF wins on timing alone.
The premature closure asymmetry
PPF permits premature closure after completing 5 full financial years for documented reasons: higher education of account holder or their children, life-threatening illness, change in residency status (NRI/OCI). The penalty is 1% lower interest rate applied retroactively across all completed years.
SSY’s premature closure rules are stricter. Valid grounds: death of the girl child or account holder, life-threatening illness, or marriage after the girl turns 18. Financial hardship is not a valid reason. An investor who opens SSY and then faces a job loss or business failure at year 10 cannot exit cleanly. The interest is recalculated at Post Office Savings Account rates (currently about 4%), which largely eliminates the compounding benefit.
This asymmetry matters most for households with variable income. If there is a meaningful probability you will need the corpus before year 18, SSY should be a partial allocation at most — keep the remainder in PPF or a more liquid instrument.
Rate risk: quarterly revision applies to both
Both PPF and SSY rates are reviewed by the Government of India every quarter. The current rates (7.1% PPF, 8.2% SSY) apply to Q1 FY 2026-27. They can change.
Historically, SSY has maintained a premium of approximately 50–110 basis points above PPF. The spread is policy, not law. The projections in this article assume current rates persist — a reasonable working assumption, but not a guarantee.
What is structurally guaranteed: the EEE tax treatment and sovereign backing. These are scheme features, not quarterly decisions. The tax exemption on maturity under Section 10(11) and Section 10(11A) is written into the Income Tax Act.
Source notes
- PPF interest rate 7.1% and scheme rules: PPF Scheme 2019, G.S.R. 915(E) dated 12 December 2019 (Ministry of Finance). Loan rules: §8. Withdrawal rules: §10. Post-maturity options: §11 and §12. Premature closure: §13.
- SSY interest rate 8.2% and scheme rules: Sukanya Samriddhi Account Scheme 2019, as amended. Premature closure grounds: Rule 9 of the scheme.
- Rate revision mechanism: National Small Savings Fund — government circulars published quarterly by Ministry of Finance (India). Both PPF and SSY rates set as spreads over g-sec yields.
- 80C deduction applicability: Section 80C of the Income Tax Act 1961, sub-section (2)(viii) for PPF and (xiiia) for SSY.
- Tax exemption on maturity: Section 10(11) of the Income Tax Act for PPF; Section 10(11A) for SSY.
Adjust your annual contribution
PPF maturity at 15 years (closed). SSY maturity at 21 years (15 deposit years + 6 years compounding). Rates are Q1 FY 2026-27 and are subject to quarterly revision by the Government of India.