SIP vs SSY vs PPF: Which 21-Year Plan Is Best For Your Daughter’s Future?
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When parents in India think about securing their daughter’s financial future, the most common choices are government-backed schemes such as Sukanya Samriddhi Yojana (SSY) and the Public Provident Fund (PPF). While these are considered safe and stable, many financial comparisons show that Systematic Investment Plans (SIPs) can potentially generate far higher returns over the long term.
How the Numbers Compare
If a parent invests ₹1.5 lakh annually for 21 years, the maturity value could be approximately:
This means SIPs can potentially generate almost double the wealth compared to traditional savings schemes.
Why SIPs Outperform SSY and PPF
Both SSY and PPF provide guaranteed returns and safety, but their growth is limited. SIPs, on the other hand, are market-linked and make use of the power of compounding, allowing money to grow much faster over two decades.
What About Smaller Investments?
The same trend holds true even for smaller annual contributions. For instance, a yearly investment of just ₹5,000 over 21 years results in:
Clearly, SIPs continue to outperform traditional savings tools even with modest amounts.
The Final Choice: Safety vs Growth
The decision ultimately depends on a family’s risk appetite. Parents who want guaranteed safety may lean towards SSY or PPF. However, those aiming for true wealth creation to fund their daughter’s higher education, marriage, or long-term future may find SIPs more rewarding.
How the Numbers Compare
If a parent invests ₹1.5 lakh annually for 21 years, the maturity value could be approximately:
- ₹71.8 lakh in Sukanya Samriddhi Yojana (SSY)
- ₹72.9 lakh in Public Provident Fund (PPF)
- ₹1.37 crore through SIPs in mutual funds
This means SIPs can potentially generate almost double the wealth compared to traditional savings schemes.
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Why SIPs Outperform SSY and PPF
Both SSY and PPF provide guaranteed returns and safety, but their growth is limited. SIPs, on the other hand, are market-linked and make use of the power of compounding, allowing money to grow much faster over two decades.
What About Smaller Investments?
The same trend holds true even for smaller annual contributions. For instance, a yearly investment of just ₹5,000 over 21 years results in:
- ₹2.39 lakh in SSY
- ₹2.43 lakh in PPF
- ₹4.58 lakh in SIPs
Clearly, SIPs continue to outperform traditional savings tools even with modest amounts.
The Final Choice: Safety vs Growth
The decision ultimately depends on a family’s risk appetite. Parents who want guaranteed safety may lean towards SSY or PPF. However, those aiming for true wealth creation to fund their daughter’s higher education, marriage, or long-term future may find SIPs more rewarding.
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