PPF and SSY are two of the most popular government-backed savings schemes in India, and they look similar on the surface: both are tax-free, both qualify for Section 80C, and both are rock solid on safety. The big differences are the interest rate and who can open them. If you have a daughter under 10, this choice is worth getting right, because the gap compounds into real money over fifteen years.
PPF vs SSY at a glance
| Feature | PPF | SSY |
|---|---|---|
| Interest rate | 7.1% | 8.2% |
| Tax status | EEE | EEE |
| 80C deduction | Yes | Yes |
| Who can open | Anyone | Girl child under 10 |
| Minimum per year | โน500 | โน250 |
| Maximum per year | โน1.5 lakh | โน1.5 lakh |
| Tenure | 15 years | 21 years |
| Deposit period | 15 years | First 15 years only |
| Withdrawal | After year 5 | 50% after she turns 18 |
| Backed by | Govt of India | Govt of India |
The rate difference that decides it
SSY beats PPF on rate by a full 1.1%, at 8.2% against 7.1%. Because both compound tax-free, that gap is not diluted by tax the way it would be with a fixed deposit. Over fifteen years at the maximum investment, the higher rate translates into several lakhs of extra maturity value. If you have a daughter under 10, that makes SSY the natural first home for your 80C money. Run your own figures through the SSY calculator and the PPF calculator to see the difference for your contribution level.
When to choose SSY
Choose SSY if you have a daughter under 10 and you are saving for her education and marriage. The higher rate and the long 21-year horizon are designed for exactly this goal, and the partial withdrawal at 18 lines up with college costs. It should generally come before PPF in your saving order for that money.
When to choose PPF
Choose PPF if you do not have an eligible daughter, if you want the money available for any purpose, or if you have already used your SSY contribution and have 80C room left. PPF is open to everyone, slightly more flexible on access, and can be extended in 5-year blocks after maturity. Many families simply do both: SSY for the daughter's future and PPF for general long-term saving.
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Financial Disclaimer: The comparisons on this page are for informational and educational purposes only. Returns, rates and tax rules are subject to change. Past investment performance does not guarantee future results. Consult a qualified financial advisor before making investment or tax decisions. Full disclaimer.
Frequently asked questions
Is SSY better than PPF?
If you have a daughter under 10, SSY usually wins on returns. It pays 8.2% a year versus PPF's 7.1%, and both are completely tax-free under the EEE status. Over fifteen years of maximum contributions, that 1.1% gap adds up to several lakhs. The trade-off is flexibility: SSY money is locked for your daughter's future and can only be opened for a girl child, while PPF is open to anyone and slightly more flexible.
Can I invest in both PPF and SSY?
Yes, and many families do. Both qualify for the Section 80C deduction, but they share the same โน1,50,000 annual limit, so the deduction does not double. A common approach is to fund SSY first because of the higher rate, then use PPF for any remaining 80C room or for goals other than a daughter's education and marriage.
What is the interest rate on SSY and PPF in 2026?
SSY pays 8.2% per annum and PPF pays 7.1% per annum for Q1 of FY 2026-27. Both rates are reviewed every quarter by the Government of India. SSY has consistently been set higher than PPF, which is part of why it is attractive for families saving specifically for a girl child.
When does an SSY account mature?
An SSY account matures 21 years after it is opened, though deposits are only required for the first 15 years. You can also make a partial withdrawal of up to 50% of the balance once your daughter turns 18, typically for higher education, and the account can be closed for her marriage after she turns 18. PPF, by contrast, has a 15-year term that can be extended in 5-year blocks.
Are PPF and SSY safe investments?
Both are about as safe as it gets in India. They are backed by the Government of India, so your capital and the promised interest are guaranteed regardless of market conditions. That government backing, combined with tax-free returns, is why both are popular with conservative, long-term savers.