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Sukanya Samriddhi Yojana (SSY) pays the highest rate of the three, at up to 8.2% a year, according to reports that small savings rates remain unchanged. PPF and NSC pay a little less, but each suits a different goal. SSY is only for a girl child's account, PPF is a 15-year tax-free habit, and NSC is a five-year lump-sum option.
So the scheme that "pays more" is not always the one you can use. This guide compares the three on rate, lock-in, eligibility and tax, then shows what the same money grows to in each.
Key takeaways
- SSY has the highest rate (up to 8.2%), but it is limited to an account for a girl child under 10 at opening.
- PPF (7.1%) gives tax-free interest and flexibility for anyone, but locks money for 15 years.
- NSC (7.7%) is the shortest at five years, but its interest is taxable.
- Rates are set by the government and reviewed every quarter, so check the current figure before you invest.
What are the current small savings rates?
The government notifies small savings rates every quarter. Reports say the latest review left them unchanged, with the top rate at 8.2%. That top rate belongs to Sukanya Samriddhi.
For the other two, the rates we have seen in recent quarters are 7.1% for PPF and 7.7% for NSC. Please confirm both on the India Post or Finance Ministry notice for the current quarter. A rate that was unchanged for a long stretch can still change in the next review.
One point matters more than the rate itself. For PPF and SSY, the rate applicable can move during your holding period. For NSC, the rate on the day you buy is locked for the full five years.
PPF vs Sukanya Samriddhi vs NSC: side-by-side table
| Feature | PPF | Sukanya Samriddhi | NSC |
|---|---|---|---|
| Recent rate | 7.1% | Up to 8.2% | 7.7% |
| Who can open | Resident Indian adults; one account each; a parent can open one for a minor | Parent or guardian for a girl child under 10 | Resident Indian adults, or a guardian for a minor |
| Lock-in | 15 years, extendable in 5-year blocks | Matures 21 years after opening; deposits for 15 years | 5 years |
| Minimum deposit | ₹500 a year | ₹250 a year | ₹1,000 |
| Maximum deposit | ₹1.5 lakh a year | ₹1.5 lakh a year | No upper limit |
| Interest on maturity | Tax-free | Tax-free | Taxable at your slab |
| Section 80C (old regime) | Yes | Yes | Yes, on the amount invested |
| Early access | Partial withdrawal from year 7; loan in early years | Up to 50% after the girl turns 18 or finishes Class 10, for education or marriage | Generally none before maturity |
The Section 80C benefit applies only if you pay tax under the old regime. Under the new regime, the deduction is not available, so the tax-free interest becomes the main tax advantage.
Which one pays more on ₹1.5 lakh a year?
Numbers settle this better than adjectives. Assume you deposit the full ₹1.5 lakh at the start of each year for 15 years. Assume the rate stays fixed, which it will not, so treat this as an illustration and not a forecast.
PPF at 7.1%
The growth factor for 15 yearly deposits at 7.1%, deposited at the start of each year, is about 27.12. Multiply it: 27.12 × ₹1.5 lakh gives roughly ₹40.7 lakh. You deposited ₹22.5 lakh, so about ₹18.2 lakh is tax-free interest.
Sukanya Samriddhi at 8.2%
At 8.2%, the factor for the same pattern is about 29.83. So 29.83 × ₹1.5 lakh gives roughly ₹44.75 lakh at the end of year 15. That is about ₹4 lakh more than PPF from identical deposits.
You do not withdraw then. The account keeps earning interest until year 21. Another six years at 8.2% takes the balance to roughly ₹71.8 lakh, with no further deposits.
NSC at 7.7%
NSC works differently, so a fair test is a one-time ₹1 lakh. After five years at 7.7%, annual compounding gives 1.077 to the power 5, or about 1.449. Your ₹1 lakh becomes about ₹1,44,900.
The gain of about ₹44,900 is taxable each year as interest income. If you are in the 30% slab, that tax could take a large share of it. The effective post-tax return then falls well below the headline 7.7%.
These are rounded estimates. Actual balances depend on deposit dates and any rate changes.
How does each scheme actually work?
PPF: the long, flexible one
PPF runs for 15 years, and you can extend it in blocks of five years with or without fresh deposits. Interest is calculated on the lowest balance between the 5th and the month-end, so depositing before the 5th helps. You can withdraw part of the money from the seventh year.
It suits anyone who wants a safe, tax-free retirement or long-term corpus. Self-employed people, who have no employer provident fund, are a natural fit.
Sukanya Samriddhi: the highest rate, with strings
An SSY account can be opened for a girl child below 10. A family can usually hold accounts for up to two girls, with limited exceptions such as twins or triplets. You deposit for 15 years from opening, and the account matures at 21 years.
The 50% partial withdrawal after the girl turns 18 is meant for education. If your daughter is within the age window, SSY usually beats PPF on both rate and tax treatment. We would fill it first, before PPF, for the same money.
NSC: the short, simple one
NSC is bought at a post office for five years. There is no yearly deposit rule, and you can invest ₹1,000 or lakhs. Interest is added every year and paid with the principal on maturity.
It makes sense when you want a fixed, government-backed return over five years and need the 80C deduction. It makes less sense for people in high tax slabs, because the interest is taxable. For that comparison with bank deposits, see our guide on PPF, SSY, NSC and FD rates compared.
Which scheme should you pick?
- You have a daughter under 10: start with SSY. It pays the most and the interest is tax-free.
- You want a long-term, tax-free corpus: choose PPF, and aim to deposit before the 5th of each month, or lump-sum in April.
- You need money in five years and want a fixed rate: NSC works, but compare the post-tax return with a bank FD before buying.
- You have a surplus beyond ₹1.5 lakh a year: PPF and SSY will cap you, while NSC will not.
Many families sensibly use two of the three. For example, SSY for the daughter and PPF for the parents' own retirement. The two limits are separate because they are different accounts.
Common mistakes to avoid
- Chasing the highest rate alone. A 15-year lock-in does not help if you need the cash in three years.
- Ignoring tax on NSC interest. Add it to your income each year, and do not expect it to be tax-free like PPF.
- Missing the minimum deposit. A PPF or SSY account that gets no minimum deposit in a year can be treated as inactive and needs a small penalty to revive.
- Assuming today's rate is permanent. PPF and SSY rates can change every quarter.
- Depositing late in the month. In PPF, a deposit after the 5th loses that month's interest.
Myth vs fact
Myth: Sukanya Samriddhi is a guaranteed 8.2% for 21 years.
Fact: The rate is reviewed regularly by the government, so the 8.2% applies to current balances only until it is revised.
Myth: PPF interest is added to your taxable income.
Fact: PPF interest and the maturity amount are exempt under current rules, which is why people call it EEE.
Do your tax rules matter here?
They do. If you have chosen the new tax regime, the 80C deduction on deposits will not help you. If you stay in the old regime, check how these deposits fit your overall 80C limit alongside EPF, insurance and ELSS. The Income Tax Department's website, incometax.gov.in, has the official rules. A chartered accountant can tell you which regime suits your income.
If you are building a calendar for deposits, our November 2026 due dates checklist is a handy place to track dates. If you also hold mutual funds, our piece on switching to direct mutual fund plans covers the other side of a long-term portfolio.
Frequently asked questions
Is Sukanya Samriddhi better than PPF?
On rate and withdrawal rules for education, yes, if you are eligible. It currently pays more than PPF and its interest is tax-free. But only a girl child's account qualifies, so for most other savers PPF remains the practical choice.
Can I invest in both PPF and SSY?
Yes. They are separate accounts with separate yearly limits of ₹1.5 lakh each. You open PPF in your name and SSY in your daughter's name as her guardian.
Is the NSC interest taxable?
Yes. The interest accrues every year and is taxed at your slab rate. Under the old regime, the interest earned in the first four years is generally treated as reinvested and may count for 80C, but please confirm the current rule with a tax adviser.
Will the small savings rates change in 2026?
The government reviews them every quarter, and reports say the latest review left them unchanged. A future review can raise, cut or hold them. Check the official notice for each new quarter.
Which small savings scheme is best for a 5-year goal?
Among these three, only NSC fits a five-year horizon. PPF and SSY lock money for far longer. Compare its taxable interest with a bank FD of similar tenure before deciding.
Bottom line
If you have a daughter under 10, open SSY first, because it pays the most and is tax-free. Use PPF as your long-term base, and keep NSC for a defined five-year goal when your tax slab is low. Before you deposit, check the current quarter's rate on the India Post or Finance Ministry notice, and speak to a chartered accountant if your tax regime is unclear.
