PPF vs SSY: Which scheme is best for your daughter's future, and where will you get massive returns? Full calculation..
In today's era of rising costs, everyone wants to ensure a secure future for their children. If you have daughters, this information is for you. Today, we will tell you about two schemes that can help secure your daughter's future: the Public Provident Fund (PPF) and the Sukanya Samriddhi Yojana (SSY).
PPF vs. SSY:
Both investment options are excellent. However, while anyone can invest in PPF, 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%, whereas the Public Provident Fund (PPF) offers 7.1%.
Age and Lock-in Period
SSY: A key feature of this scheme is that the account can only be opened for daughters up to 10 years of age. Investments must be made for a total of 15 years. However, there is a catch: the full amount can only be withdrawn 21 years after the account opening date. That said, if funds are required for your daughter's education, you can withdraw up to 50% of the amount once she turns 18.
PPF: This scheme has a lock-in period of 15 years. After 15 years, you can choose to withdraw the money or extend the scheme. There are also specific rules if you need to withdraw funds before the maturity period ends. Understanding the calculations:
Calculation for SSY-
Average annual investment: ₹60,000 (i.e., ₹5,000 per month)
Daughter's age: Assume 5 years
Interest rate on the scheme: 8.2%
Account start date: 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, she will have ₹27,71,031 accumulated in the account 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 invest in SSY. You will earn a higher interest rate, and a substantial fund will be ready for her by the time she grows up. However, if you simply want to invest while avoiding market risks, then PPF could be a good option for you.
Disclaimer: This content has been sourced and edited from News18 Hindi. 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.
