Planning for a child's future is one of the biggest financial responsibilities for parents. From school and higher education to professional courses and marriage, major expenses can require a substantial amount of money. Starting early can therefore make it easier to build a sizeable fund over the long term.

For parents looking for government-backed savings options, the Sukanya Samriddhi Yojana (SSY) and Public Provident Fund (PPF) are two popular choices. Both encourage long-term saving and offer tax benefits, but they are designed for different purposes and have different eligibility and withdrawal rules.

The biggest difference currently is the interest rate. SSY offers a higher return than PPF, but SSY can only be opened for an eligible girl child. PPF, on the other hand, is available more broadly and can also be used to build a long-term corpus for a son or daughter.

So which one should parents choose? Understanding the rules and looking at some calculations can make the decision easier.

SSY Offers 8.2% Interest, While PPF Gives 7.1%

For the July-September 2026 quarter, the government has kept interest rates on small savings schemes unchanged. The Department of Economic Affairs issued the latest revision notification on June 30, 2026.

Under the prevailing rates, the Sukanya Samriddhi Yojana offers 8.2% per annum, while the Public Provident Fund carries an annual interest rate of 7.1%.

This gives SSY an interest-rate advantage of 1.1 percentage points over PPF.

Over a long investment period, even a difference of around one percentage point can have a substantial effect because of compounding.

What Is Sukanya Samriddhi Yojana?

Sukanya Samriddhi Yojana is specifically designed to help families save for the future financial needs of a girl child.

An SSY account can generally be opened for a girl before she turns 10. The parent or legal guardian manages the account while she is a minor.

The scheme requires a minimum annual deposit of ₹250, while the maximum investment permitted in a financial year is ₹1.5 lakh.

Deposits are required for 15 years from the date the account is opened, while the account matures 21 years from the opening date, subject to the scheme's applicable rules.

This structure makes SSY particularly suitable for long-term goals such as a daughter's higher education or marriage.

How Much Can ₹1 Lakh a Year Grow in SSY?

Consider a parent who opens an SSY account for a young daughter and deposits ₹1 lakh every year for 15 years.

The total amount contributed would be:

₹1 lakh × 15 years = ₹15 lakh

At the prevailing interest rate of 8.2%, the corpus can potentially grow to approximately ₹46 lakh by the end of the 21-year maturity period, assuming the interest rate remained unchanged throughout.

That means a contribution of ₹15 lakh could potentially generate roughly ₹31 lakh in interest over the entire period.

However, SSY interest rates are reviewed by the government periodically. Therefore, this calculation is illustrative and the actual maturity amount can be higher or lower depending on future rates and the timing of deposits.

How Does PPF Work?

Public Provident Fund is a broader long-term savings scheme and is not restricted to a girl child.

A PPF account has an initial maturity period of 15 years. After maturity, it can be extended in blocks of five years according to applicable rules.

Like SSY, PPF allows a maximum contribution of ₹1.5 lakh in a financial year. The minimum annual contribution required to keep the account active is ₹500.

This flexibility makes PPF useful for several long-term objectives, including children's education, retirement planning and general wealth accumulation.

Parents can also open a PPF account on behalf of a minor, subject to the overall investment limits and scheme conditions.

What Could ₹1 Lakh a Year Become in PPF?

Suppose ₹1 lakh is deposited into PPF every year for 15 years.

The investor would contribute a total of:

₹1 lakh × 15 years = ₹15 lakh

At an assumed constant annual interest rate of 7.1%, the corpus after 15 years could be around ₹27 lakh, depending on when the annual contributions are made.

If the account is extended and contributions continue for a longer period, compounding can substantially increase the accumulated amount.

This is why comparing SSY and PPF solely on their original maturity periods can be misleading. SSY has a 21-year maturity framework with deposits made for 15 years, while PPF initially matures after 15 years but can subsequently be extended.

SSY vs PPF: Key Differences Parents Should Know

Which Scheme Is Better for a Daughter?

If the primary goal is specifically to build a long-term fund for an eligible daughter, SSY can have a clear advantage because its current interest rate is higher.

The additional 1.1 percentage points can make a meaningful difference over a long period.

Its structure also encourages parents to maintain a disciplined savings plan for their daughter's future.

However, the restrictions associated with the scheme must also be considered. The money is primarily intended for the girl child's future, and withdrawals are governed by specific conditions.

What About Saving for a Son?

SSY cannot be used for a son because the scheme is exclusively designed for girl children.

For parents saving for a son's higher education or other long-term financial requirements, PPF can be an option.

The 15-year tenure provides a long investment horizon, and the option to extend the account in five-year blocks can make it useful for goals extending beyond the initial maturity date.

Parents can also consider other investment products depending on their risk tolerance, time horizon and financial objectives rather than relying on a single scheme.

Tax Benefits Are Another Major Attraction

Both schemes offer attractive tax treatment under prevailing rules.

Eligible investments can qualify for deductions under Section 80C of the Income Tax Act, subject to the applicable overall limit and the tax regime selected by the taxpayer.

Interest earned and qualifying maturity proceeds also enjoy favourable tax treatment under current provisions.

Investors should nevertheless check the tax rules applicable to them in the relevant financial year because taxation policies can change.

Don't Choose a Scheme Only Because Its Interest Rate Is Higher

An interest rate is important, but it should not be the only factor determining where you invest.

Parents should first identify the financial goal, the child's current age, the number of years remaining before the money is required and the amount they can invest regularly.

For example, SSY may be highly suitable for parents with a young daughter and a goal that is many years away. PPF may be more appropriate when greater flexibility is required or when saving for a son.

Liquidity is another consideration. These are long-term savings products, so money should not be invested in them if it is likely to be required for immediate expenses.

Starting Early Can Make a Big Difference

Whether parents choose SSY, PPF or a combination of investments, starting early can significantly reduce the financial pressure of achieving a large target.

Compounding becomes more powerful when money remains invested for many years. A family that begins saving when a child is very young generally has considerably more time to build a corpus than one that starts shortly before college.

Regular contributions are equally important. Even if a parent cannot invest the maximum ₹1.5 lakh every year, consistently investing an affordable amount can help build financial discipline.

The Bottom Line

Sukanya Samriddhi Yojana and Public Provident Fund are both government-backed long-term savings options, but they serve somewhat different purposes.

SSY currently offers 8.2% interest compared with PPF's 7.1%, giving it a 1.1 percentage-point advantage. For parents saving specifically for an eligible daughter's long-term education or marriage expenses, SSY can therefore be an attractive option.

PPF provides broader eligibility and greater flexibility in terms of financial goals, making it useful for parents planning for either a son's or daughter's future as well as their own long-term needs.

Rather than choosing solely on the basis of returns, parents should compare eligibility, tenure, liquidity, contribution limits and the age at which the money will actually be needed.

Note: The maturity calculations above are illustrative. SSY and PPF interest rates are determined by the government and reviewed periodically, so actual future returns may differ.