SSY vs PPF: Where Will a ₹5,000 Monthly Investment Grow More? Compare Returns, Benefits and Maturity

SSY vs PPF: If you can invest ₹5,000 every month for the long term, should you choose the Sukanya Samriddhi Yojana (SSY) or the Public Provident Fund (PPF)? Both are government-backed savings schemes that offer attractive returns and tax benefits, but they differ in eligibility, tenure, and maturity value. Here's a detailed comparison.

Two Popular Government Savings Schemes

For investors looking to build long-term wealth with minimal risk, Public Provident Fund (PPF) and Sukanya Samriddhi Yojana (SSY) remain among the most trusted investment options.

Both schemes are backed by the Government of India, making them suitable for conservative investors seeking capital safety along with tax-saving benefits. However, choosing between the two depends largely on your financial goals and eligibility.

PPF vs SSY: Key Differences

Although both schemes encourage disciplined savings, they are designed for different purposes.

Public Provident Fund (PPF)

• Open to all eligible Indian residents.

• Suitable for salaried employees, self-employed individuals, farmers, and business owners.

• Current interest rate: 7.1% per annum.

• Lock-in period: 15 years.

• Can be extended after maturity in blocks of five years.

Sukanya Samriddhi Yojana (SSY)

• Available only for a girl child below the age of 10 years.

• Account can be opened by parents or legal guardians.

• Current interest rate: 8.2% per annum.

• Deposits are required for 15 years.

• Account matures after 21 years from the date of opening.

What Happens If You Invest ₹5,000 Every Month?

A monthly investment of ₹5,000 works out to:

• Annual investment: ₹60,000

• Investment period: 15 years

• Total investment: ₹9,00,000

The final maturity amount depends on the interest rate and the duration for which the investment continues to earn returns.

Estimated Returns in PPF

Assuming the current interest rate of 7.1% per annum remains unchanged throughout the investment period, the estimated figures would be:

• Total investment: ₹9,00,000

• Estimated interest earned: Around ₹7.27 lakh

• Approximate maturity value after 15 years: ₹16.27 lakh

This means your investment nearly doubles over the 15-year tenure through the power of compounding.

Estimated Returns in Sukanya Samriddhi Yojana

The investment amount remains the same:

• Total investment: ₹9,00,000

• Deposits made for 15 years.

• Account continues earning interest until maturity at 21 years.

At the current interest rate of 8.2% per annum, the estimated maturity value could reach approximately ₹30.7 lakh.

The significantly higher corpus is mainly due to:

• A higher interest rate than PPF.

• An additional six years of compounding even after deposits stop.

Why SSY Generates a Larger Corpus

The Sukanya Samriddhi Yojana offers two major advantages over PPF for eligible investors.

Higher Interest Rate

The scheme currently offers 8.2% annual interest, which is higher than the 7.1% available under PPF.

Longer Compounding Period

Although contributions are made for only 15 years, the accumulated balance continues earning interest until the account completes 21 years, allowing the investment to grow substantially.

Tax Benefits Under Both Schemes

Both PPF and SSY qualify for tax benefits under Section 80C of the Income Tax Act.

Investors can claim deductions of up to ₹1.5 lakh per financial year on eligible contributions.

In addition:

• Interest earned remains tax-free.

• The maturity amount is also exempt from tax.

This makes both schemes fall under the EEE (Exempt-Exempt-Exempt) category, offering tax benefits at the investment, interest, and maturity stages.

Which Scheme Should You Choose?

The right choice depends on your financial objective.

Choose Sukanya Samriddhi Yojana If:

• You have a daughter below 10 years of age.

• You are planning for her higher education or marriage.

• You want potentially higher long-term returns.

Choose Public Provident Fund If:

• You are saving for retirement or long-term wealth creation.

• You want a government-backed investment open to all eligible individuals.

• You prefer flexibility in extending the account beyond 15 years.

Final Comparison

Based on the current interest rates:

While Sukanya Samriddhi Yojana offers the potential for a significantly larger maturity amount, it is available only for eligible girl children. Public Provident Fund, on the other hand, remains a versatile long-term savings option suitable for a wider range of investors.

Before investing, consider your financial goals, investment horizon, and eligibility rather than focusing only on projected returns.

Disclaimer: Interest rates on small savings schemes are reviewed periodically by the Government of India. Actual returns may vary if rates are revised in the future. Investors should evaluate their financial objectives and consult a qualified financial advisor before making investment decisions.