In today's era of rising costs, every parent dreams of a financially secure and robust future for their children—especially their daughters. If you are considering building a substantial fund for your daughter's future, this information is for you. Let us explore the Public Provident Fund (PPF) and the Sukanya Samriddhi Yojana (SSY), both of which can help create a significant corpus for your daughter.

PPF vs. SSY:

While both investment options are excellent, there are key differences. Anyone can invest in a PPF account, whereas an SSY account can only be opened in the name of a daughter. There is also a significant difference in interest rates; currently, the Sukanya Samriddhi Yojana (SSY) offers an impressive interest rate of 8.2%, while the Public Provident Fund (PPF) offers 7.1%.

Scheme | Eligibility | Investment Tenure | Maturity Period | Premature Withdrawal Rules

Sukanya Samriddhi Yojana (SSY) | Only for daughters up to 10 years of age. | Investment required for a total of 15 years. | The full amount can be withdrawn 21 years after the account opening date. | Up to 50% of the total amount can be withdrawn for higher education once the daughter turns 18.

Public Provident Fund (PPF) | Any citizen of the country (in their own name or their daughter's name). | 15 years or longer, as required. | Lock-in period is 15 years (extendable). | Specific terms and conditions apply for withdrawals before the completion of the 15-year term. Understanding the calculations:

Calculation for SSY-

Average annual investment: ₹60,000 (i.e., ₹5,000 per month)
Daughter's age: Let's assume 5 years
Interest rate on the scheme: 8.2%
Account start date: Let's assume you start the account in 2026
Total investment over 21 years: ₹9 lakh
Account maturity year: 2047
Total accumulated fund in 2047: ₹27,71,031
The calculation clearly shows that if you open an account for your 5-year-old daughter, a sum of ₹27,71,031 will have accumulated in her name by the time she turns 26. You can open this account for a daughter of any age up to 10 years.

Calculation for PPF-

Average annual investment: ₹60,000 (i.e., ₹5,000 per month)
Investment tenure: 15 years
Interest rate on the scheme: 7.1%
Total investment over 15 years: ₹9 lakh
Accumulated amount after 15 years: ₹16,27,284
The calculation clearly indicates that if you invest the same amount in SSY as you would in PPF, you will earn higher returns.

Which is better for you?
If you wish to invest specifically for your daughter, then SSY is the better choice. You will earn a higher interest rate, and by the time your daughter grows up, a substantial fund will be ready for her. However, if your goal is simply to invest while avoiding market risks, then PPF could be a good option for you.

PC Social Media