Sukanya Samriddhi or PPF: Which Suits a Child's Future?

For a long-term, tax-free, government-backed corpus, two products come up again and again: the Sukanya Samriddhi Yojana for a girl child, and the Public Provident Fund for anyone. Both offer exempt-exempt-exempt treatment. They differ in timeline, in limits and in who can open them.

The structure of each

Sukanya Samriddhi lets a parent or guardian deposit up to ₹1.5 lakh a year for fifteen years. Deposits stop after that, but the account matures twenty-one years from opening — so the final six years compound without any new money going in. Withdrawals are permitted only for higher education after the child turns eighteen.

PPF also allows up to ₹1.5 lakh a year, runs for fifteen years, and can be extended in blocks of five. Partial withdrawal is allowed from year seven, and loans against the balance from year three. It is more flexible and available to anyone.

Our Sukanya Samriddhi calculator and PPF calculator project both for any deposit schedule.

The numbers, compared

Deposit ₹1,50,000 a year in each.

• Sukanya Samriddhi at 8.2% for fifteen deposit years, maturing at twenty-one: total deposits ₹22,50,000, projected maturity roughly ₹71.8 lakh, of which about ₹49.3 lakh is tax-free interest.
• PPF at 7.1% for fifteen years: total deposits ₹22,50,000, projected maturity roughly ₹40.7 lakh, with about ₹18.2 lakh of interest.

The gap comes from two things: a higher notified rate, and six additional years of compounding after deposits stop. That second factor is the one people underestimate.

Where each one fits

• Sukanya Samriddhi if you have a daughter under ten and the money is genuinely for her education or marriage. The long lock-in is a feature, not a bug, and the rate is usually higher.
• PPF if you want the same tax-free certainty without a child-specific account, and you value the ability to withdraw partially from year seven or extend the account indefinitely.

They are not mutually exclusive. A household can hold both, using PPF for general long-term savings and Sukanya Samriddhi specifically for a daughter's future.

What neither of them will do

Both protect capital and deliver a fixed, tax-free return. Neither will meaningfully beat inflation over thirty years on its own, because the rates are set by the government and tend to track rather than exceed price growth.

So treat them as the stable part of a plan, not the whole plan. A common structure is these accounts for safety and tax benefits, with a SIP in equity funds for the growth portion. The retirement calculator shows what happens if you rely on fixed-rate products alone over a long horizon — the corpus usually falls short.

Practical points

• Deposit early in the financial year so the full amount earns interest for twelve months.
• Stay within ₹1.5 lakh a year in each account; anything above earns nothing and gives no deduction.
• Keep the minimum deposit flowing in Sukanya Samriddhi (₹250 a year) to avoid the account going dormant.
• Remember both are only tax-advantaged under the old regime for the deduction. The maturity is tax-free either way.