Choosing the right investment option is crucial when saving for a girl's higher education, marriage, or future financial needs. The government's Public Provident Fund (PPF) and Sukanya Samriddhi Yojana (SSY) are both popular savings schemes. However, there are significant differences in interest rates, eligibility, tenure, and withdrawal rules.

What is the Sukanya Samriddhi Yojana (SSY)?
An SSY account can be opened in the name of a girl child under the age of 10. The current interest rate for this scheme is 8.2%. The account's tenure is 21 years, and deposits are required only for the first 15 years.

After the girl turns 18, up to 50% of the account balance can be withdrawn for higher education at the end of the previous financial year. There is also a provision for premature closure of the account under certain circumstances.

What are the benefits of PPF?
PPF currently offers an interest rate of 7.1%. The scheme's original tenure is 15 years. After that, it can be extended in blocks of 5 years. There's the option to withdraw a small amount or take a loan from PPF, subject to certain conditions.

How much will you earn if you invest ₹5,000 per month?
₹5,000 per month equals ₹60,000 per year, and a total investment of ₹9 lakh over 15 years.

PPF: Assuming a rate of 7.1%, you can get around ₹16.27 lakh after 15 years.

SSY: Assuming an 8.2% interest rate, you can accumulate ₹9 lakh in 15 years. After that, if you continue to earn interest for the next 6 years, this amount can grow to over ₹27.7 lakh in 21 years.

PPF or SSY?
If you want to create a separate, long-term fund for your daughter's future, SSY may be a better option. However, if you want more flexibility in your investments, PPF is a good option.