SSY vs PPF: an honest, numbers-first comparison
Both are government-backed, both are EEE. But the returns, lock-in, and flexibility are very different. Here is the full picture without the sales pitch.
The two most common government savings schemes in India — PPF and SSY — get compared constantly, usually by someone trying to sell you a third option. This article does it differently: same assumptions, actual numbers, honest trade-offs.
The core difference in one sentence
PPF is a flexible, long-term savings vehicle for anyone. SSY is a higher-yield, shorter-horizon scheme exclusively for a girl child — with meaningful constraints on who can open it, when you can exit, and how much you can invest.
If you have a daughter below 10 years old, the rate differential alone makes SSY worth examining seriously. If you do not, the question is moot.
Side-by-side
| Feature | SSY (2026) | PPF (2026) |
|---|---|---|
| Interest rate | 8.2% p.a. (compounded annually) | 7.1% p.a. (compounded annually) |
| Who can open | Girl child below 10; parent/guardian | Any Indian resident individual |
| Maximum accounts per family | 2 (one per girl child; twins exception) | 1 per individual |
| Minimum deposit/year | ₹250 | ₹500 |
| Maximum deposit/year | ₹1,50,000 | ₹1,50,000 |
| Deposit period | 15 years from account opening | 15 years from account opening |
| Maturity | 21 years from account opening | 15 years (extendable in 5-year blocks) |
| Partial withdrawal | 50% of balance after girl turns 18 | Up to 50% from year 7 onwards |
| Premature closure | After 5 years; limited grounds | After 15 years; or limited grounds |
| Tax on interest | Fully exempt (EEE) | Fully exempt (EEE) |
| Tax on maturity | Fully exempt (EEE) | Fully exempt (EEE) |
| Section 80C deduction | Yes (up to ₹1.5 L limit) | Yes (up to ₹1.5 L limit) |
The number that matters: terminal value at ₹12,500/month
Let us run both schemes at maximum contribution: ₹1,50,000/year (₹12,500/month), deposited at the start of each year, for 15 years. We compare maturity values at their natural end points — 21 years for SSY, 15 years for PPF.
SSY at 8.2% (21-year horizon)
| Period | Annual deposit | Year-end balance (approx) |
|---|---|---|
| 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 |
| Year 16–21 | ₹0 (no deposits) | compounds at 8.2% |
| Year 21 (maturity) | — | ≈₹80,00,000 |
Total deposited: ₹22,50,000. Interest earned: ≈₹57,50,000. EEE on all of it.
PPF at 7.1% (15-year horizon, no extension)
| Period | Annual deposit | Year-end balance (approx) |
|---|---|---|
| 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. EEE on all of it.
What if you extend PPF by 6 more years?
Extending PPF for two 3-year blocks (to reach year 21 for an apples-to-apples comparison) with no further contributions:
Year 15 corpus: ≈₹40,68,000. Year 21 corpus at 7.1%: ≈₹40,68,000 × (1.071)^6 ≈ ₹61,40,000.
Still ₹18–19 lakh below SSY at the same 21-year mark.
The gap across contribution levels
| Monthly deposit | SSY at 21 yrs | PPF at 21 yrs (extended, no top-up) | SSY advantage |
|---|---|---|---|
| ₹500/month | ≈₹3,20,000 | ≈₹2,46,000 | +₹74,000 |
| ₹3,000/month | ≈₹19,20,000 | ≈₹14,72,000 | +₹4,48,000 |
| ₹12,500/month | ≈₹80,00,000 | ≈₹61,40,000 | +₹18,60,000 |
The higher the contribution, the larger the absolute advantage of the 110 bps rate gap.
When SSY wins clearly
You have a daughter below 10. The math above speaks for itself. The rate differential compounds over 21 years into a meaningful advantage: ₹18+ lakh more at max contribution. This is not a rounding error.
You do not need the money before the girl turns 18. SSY’s partial withdrawal window opens only after the girl turns 18, for education or marriage. If your investment horizon lines up with this milestone, the lock-in is not a cost — it is forced discipline.
You are already maxing PPF. Both accept ₹1.5 L/year under Section 80C. If you have a daughter, you can hold both — one SSY account for her, one PPF account for yourself. The 80C limit is per taxpayer, so a couple could theoretically run PPF (him) + PPF (her)
- SSY — three EEE accounts simultaneously.
When PPF wins or ties
You do not have a daughter below 10. SSY is simply unavailable to you. PPF at 7.1% EEE is still one of the best risk-free options in India.
You need flexibility. PPF allows partial withdrawals from year 7, and extensions in 5-year blocks with or without contributions. SSY’s structure is fixed: 15 deposit years, 21-year maturity, and that is that. If your financial life has real uncertainty, PPF’s optionality is worth something.
The horizon is shorter than 21 years. If you open an SSY account for a 9-year-old, maturity is when she is 30 — that is your only clean exit. PPF at 15 years is done when your 9-year-old is 24. If the latter matters more to your planning, go PPF.
The premature closure trap
SSY permits premature closure after 5 years, but only in specific circumstances: death of the account holder, life-threatening illness of the account holder or parent/guardian, or marriage of the girl after she turns 18.
Crucially: financial hardship is not a valid reason for premature closure. If you open SSY and then need the money at year 12 because of a job loss, you cannot exit cleanly. The penalty for other circumstances is severe — interest is recalculated at Post Office Savings Account rates (currently ~4%), which largely erases the compounding advantage.
PPF is more forgiving: you can close prematurely after 5 years for specified reasons (higher education, medical treatment), with a 1% interest penalty. The list of valid reasons is narrower than you might hope, but the penalty is smaller.
Implication: only commit to SSY if you are confident the money stays locked until the natural exit. If there is meaningful probability you will need it before year 18, treat SSY as a partial allocation and keep the rest in PPF or other more liquid instruments.
One counter-intuitive point: SSY rate is not guaranteed for 21 years
Both SSY and PPF rates are reviewed quarterly by the Government of India and can change. The rate you see today (8.2% for SSY, 7.1% for PPF) is not locked in for the life of the account — it applies to each financial year as set by the government.
Historically, SSY has maintained a premium over PPF of approximately 50–110 basis points. That spread is policy, not law, and could theoretically narrow. The numbers in this article assume the current rates persist — which is a reasonable working assumption, but not a guarantee.
What is guaranteed: the EEE status and the government backing (sovereign credit risk). Those are structural features of the scheme, not dependent on quarterly rate decisions.
Summary
SSY is a better vehicle than PPF purely on yield, for the subset of families it serves. The constraints — girl child requirement, age limit, fixed 21-year horizon, illiquidity before 18 — are real costs. But if your situation fits, none of those constraints is onerous. The compounding cliff between year 15 and year 21 is where SSY quietly builds its largest advantage.
The honest recommendation: if you have a daughter below 10, open an SSY account. Max it if you can. Continue PPF in parallel for your own long-term savings. Do not pick one; the 80C umbrella is large enough for both.
Rates cited: SSY 8.2% (Q1 FY 2026-27), PPF 7.1% (Q1 FY 2026-27). All projections are illustrative; actual values depend on quarterly rate revisions. Not investment advice.
Further Reading
Newspapers & Magazines 15 articles
Sukanya Samriddhi Yojana: safe, tax-free — but is the lock-in too long?
A pointed look at the 21-year lock-in as a liquidity risk, not just a feature — the counterargument to the standard "just start early" advice.
Sukanya Samriddhi Yojana returns explained: What yearly investments can grow into
Return tables at every common annual deposit level — useful to see how the compounding math plays out across the full contribution range.
SSY maturity rule: If you start investing ₹1.5 lakh at age 10, when will you get ₹72 lakh?
Shows how the age at which you open the account changes the final corpus — the compounding cliff that makes an early start so disproportionately valuable.
NPS Vatsalya vs Sukanya Samriddhi Yojana: What to choose for your children?
Side-by-side on eligibility, returns, tax benefits, and flexibility — useful for parents weighing SSY against the newer market-linked alternative.
Sukanya Samriddhi, provident fund, bank deposits, mutual funds — compare investments for your child
A multi-asset comparison for child-goal investing: where SSY fits against FDs, RDs, PPF, and equity mutual funds across horizon and risk appetite.
Sukanya Samriddhi: How to withdraw full or partial amount before the 21-year tenure
Step-by-step guide to partial withdrawal at 18 for education and full closure at 18 for marriage — the mechanics most guides leave vague.
Sukanya Samriddhi Yojana (SSY): Tax benefits, interest rate, eligibility and other details
ET Wealth's comprehensive explainer — the go-to reference for EEE status, Section 80C deduction, and account-opening rules all in one place.
SSY interest rate 2025: What will be maturity amount if you invest ₹1.50 lakh/year?
Projection at the maximum annual deposit: what the corpus looks like at 8.2% across a full 21-year horizon.
₹50L, ₹75L or ₹1Cr: What is the maximum corpus you can build through SSY?
Scenarios at different annual contribution levels — useful for setting realistic expectations about how much SSY alone can fund.
Sukanya Samriddhi completes 11 years: How can you get ₹72 lakh on maturity for your daughter?
Milestone coverage with updated projections — a good data-point anchor for how much the scheme has grown since its 2015 launch.
New rules for Small Savings Schemes: PPF to SSY changes effective Oct 1
The October 2024 regulatory changes: grandparent-to-parent guardian transfers, NRI PPF closure rules, and how irregular SSY accounts are now handled.
SSY: Attractive scheme for a girl child, provided you don't mind the long lock-in
A balanced evaluation: acknowledges the EEE tax advantage and guaranteed rate, then names the liquidity constraint as the central trade-off.
Is Sukanya Samriddhi Yojana the best investment option for a girl child?
A critical evaluation rather than a pure endorsement — examines scenarios where SSY is not optimal and what alternatives to consider alongside it.
The Triple-Tax Advantage: Why Sukanya Samriddhi Yojana is still the best 80C investment in 2026
The EEE status argument made explicitly for the new-tax-regime era — why SSY's exempt-exempt-exempt structure is rare even among small savings options.
PPF, NSC, SCSS and Sukanya Samriddhi Yojana: a guide to must-haves in your portfolio
Portfolio construction guide that positions SSY alongside PPF and NSC as the core small-savings holding — with clear rules for which instrument fits which goal.
Investing Blogs 4 articles
Sukanya Samriddhi Yojana Interest Rate History 2015 to Present
The complete rate table from 9.1% (January 2015) to 8.2% (January 2024 onwards) — essential context for understanding how the guaranteed rate has moved over a decade.
Sukanya Samriddhi Yojana vs PPF: An Illustration
Numerical side-by-side with illustrated calculator output — the clearest worked example of how SSY and PPF diverge over a 21-year horizon at the same annual contribution.
Why are PPF and Sukanya Samriddhi interest rates still so high?!
Explains the g-sec + 0.75% rate formula that the government is supposed to follow — and documents the years when it has overridden the formula in both directions.
LIC Kanyadaan Policy vs Sukanya Samruddhi Yojana: Which is a better investment for my girl child?
Direct comparison between SSY and LIC's endowment product targeted at girl-child goals — shows how insurance-linked savings products compare against the government scheme on returns and flexibility.