SSY vs PPF: Where will the bigger fund be created first, which one offers higher interest and better returns on investing ₹1 lakh?

SSY vs. PPF Comparison: There are two excellent options for safe and guaranteed returns. The first is the Sukanya Samriddhi Yojana (SSY) and the second is the PPF (Public Provident Fund). Both are excellent government investment options. Both schemes offer tax benefits and are risk-free. But the big question is: if you invest ₹1 lakh annually, who will build a larger fund? How much will a larger fund be built if you invest consistently for 10-15 years? So let's understand the complete calculation.

What is the Sukanya Samriddhi Yojana (SSY)?
The Sukanya Samriddhi Yojana is a government scheme launched in 2015. This scheme is part of the "Save the Daughter, Educate the Daughter" campaign and helps parents save for their daughters' future. A minimum annual deposit of ₹250 is required to keep the account active, while the maximum annual deposit is ₹1.5 lakh.

Who can invest? Parents or guardians in the daughter's name.

Interest rate - Currently 8.2% per annum (determined by the government every quarter).
Investment period: 15 years.
Maturity period: 21 years from the date of account opening.
Tax exemption: Up to ₹1.5 lakh under Section 80C. No tax on interest or maturity amount.

Calculation (SSY):
If an individual invests ₹1 lakh (approximately ₹8,333 per month) every year for 15 years, at an interest rate of 8.2%, the fund will be approximately ₹36.5 lakh at maturity. The total investment is ₹15 lakh, and the profit will be approximately ₹21.5 lakh.

What is Public Provident Fund (PPF)?
Every Indian, whether employed or a businessman, can invest in PPF. Accounts are opened at post offices or select banks, and the lock-in period is 15 years. You can deposit a minimum of ₹500 and a maximum of ₹1.5 lakh annually. Currently, it offers 7.1% interest. Both maturity and interest are tax-free. After maturity, it can be extended for 5 years each.

Who can invest: Any Indian citizen.
Interest rate: Currently 7.1% per annum.
Investment period: 15 years (thereafter, it can be extended for 5 years each).
Tax exemption: Like SSY, the interest and maturity amount are completely tax-free.
Calculation (PPF):
If an individual deposits ₹1 lakh every year in PPF for 15 years, then at an interest rate of 7.1%, the maturity corpus will be approximately ₹31.2 lakh. The total investment here is ₹15 lakh, and the profit is approximately ₹16.2 lakh.

SSY vs. PPF: 10-Year Calculation
A deposit of ₹10 lakh in SSY over 10 years will generate a corpus of approximately ₹14.9 lakh with an interest rate of 8.2%.
PPF with an interest rate of 7.1% will generate a corpus of approximately ₹13.8 lakh.

SSY vs. PPF: Which is better?
If you have a daughter and want to invest for her future, the Sukanya Samriddhi Yojana (SSY) is a better option because it offers higher interest rates and tax-free returns. However, if you want a secure, long-term investment for yourself, the PPF is a good and flexible option, as you can expand it later.

For the same amount (₹1 lakh annually), SSY generates approximately ₹5 lakh more in 15 years. Therefore, SSY is the most sensible option for your daughter's future, and PPF for personal retirement planning.

Disclaimer: This content has been sourced and edited from Dainik Jagran. While we have made modifications for clarity and presentation, the original content belongs to its respective authors and website. We do not claim ownership of the content.