Sukanya Samriddhi Yojana vs PPF vs Mutual Funds: What is the best investment for your child’s education, future?

For most Indian parents, planning for a child’s future is not just a financial task—it is an emotional commitment tied to aspirations, security, and upward mobility. Rising education costs, increasingly competitive career paths, and growing lifestyle expectations have made early and structured financial planning more crucial than ever. Children’s Day serves as a timely reminder to reassess financial goals and ensure that long-term plans are aligned with future needs. Experts say that a disciplined, long-term approach is the cornerstone of building a strong financial foundation for children.

According to Dhirendra Kumar, CEO of Value Research, the biggest mistake parents make is mixing up everyday savings with long-term goals such as education. “Your child’s education cannot wait. It is a non-negotiable goal,” he stresses. “It’s better to be over-prepared than under-prepared. Even if you save more than needed, that’s fine. But having no preparation is never an option.”

Among the most popular child-focused investment choices today are Sukanya Samriddhi Yojana (SSY), the Public Provident Fund (PPF), and mutual funds. SSY, designed exclusively for girl children, currently offers the highest fixed-income rate at 8.2%, while PPF offers slightly lower but still attractive guaranteed returns. These government-backed schemes appeal to parents who want security and predictability. “There is nothing safer than these products,” Kumar explains. However, he observes that even attractive fixed-income returns cannot match the long-term potential of equity.

A monthly investment of Rs 10,000 over 15 years grows to around Rs 35–36 lakh in SSY, while a diversified equity mutual fund, even at a conservative 12% return, could generate Rs 48 lakh. This substantial difference, Kumar says, highlights the power of compounding in market-linked investments.

Still, many parents hesitate to invest in equity due to volatility. Kumar believes this hesitation stems from unfamiliarity rather than risk. “People invest at the wrong time, panic when markets fall, and exit prematurely. Equity works beautifully only when you stay the course,” he explains. He advises families to get the basics in place—an emergency fund, health insurance, and a systematic investment habit. “Treat investing as routine: earn, save, invest. Not a one-time event.”

While mutual funds offer the highest return potential, PPF remains one of the most trusted savings schemes in India. PPF is an EEE (Exempt-Exempt-Exempt) instrument—contributions offer Section 80C tax benefits, interest is tax-free, and maturity proceeds are fully exempt. Its 15-year lock-in, extendable in blocks of five years, makes it ideal for long-term goals. Deposits between Rs 500 and Rs 1.5 lakh a year are allowed, and interest is best maximised by investing before the 5th of each month. At an interest rate of 7.1%, a Rs 1.5 lakh annual investment grows to about Rs 40.68 lakh in 15 years.

Sukanya Samriddhi Yojana, on the other hand, is tailored specifically for a girl child under the “Beti Bachao Beti Padhao” initiative. It allows deposits from ₹250 to ₹1.5 lakh per year and matures after 21 years. SSY consistently offers higher returns than PPF, making it the most attractive fixed-income investment for girls.

Given the strengths of each product, Kumar advises parents not to think in terms of “this or that.” Instead, he recommends a blended approach—fixed income for safety and equity for growth. “Invest ₹5,000 in SSY on your daughter’s birthday, but also start an SIP and increase it every year. After two to three years, the benefits will become self-evident.”

With education inflation rising faster than general inflation, financial experts believe early preparation is essential. As Kumar concludes, “Let’s stay positive but prepare more. Give your child not just dreams, but the financial support to pursue them.”

PPF Maturity Amount Examples (15-Year Tenure at 7.1% Interest)
Investment Type    Yearly / Monthly Contribution    Estimated Maturity Value (Approx.)
Annual Investment    Rs 1,00,000    Rs 27,12,139
Annual Investment    Rs 1,50,000    Rs 40,68,209
Monthly Investment (SIP)    Rs 10,000 per month    Rs 32,54,567