PPF vs Sukanya Samriddhi vs fixed deposit — the rules side by side

These three are compared constantly and are not the same kind of thing. The Public Provident Fund and the Sukanya Samriddhi account are small savings schemes of the central government, run through post offices and authorised banks under rules the Ministry of Finance notifies; their interest rate is set by the Government each quarter. A fixed deposit is a contract with one bank: the bank sets the rate, and it is fixed for the term you choose. Here are the rules of each, so the comparison is between the right things.

Who can open one

PPF: any resident individual, one account in their own name, plus accounts on behalf of minor children (National Savings Institute). Sukanya Samriddhi: a parent or guardian opens it in the name of a girl who is under ten years old; a family may have accounts for two girls, with an exception for twins or triplets. Fixed deposit: anyone with a bank account, including minors through a guardian, jointly or singly.

How long the money is locked

PPF runs for fifteen financial years from the end of the year of opening, and can then be extended in blocks of five years, with or without further deposits. Partial withdrawals are allowed from the seventh year, a loan against the balance in the third to sixth years, and premature closure after five years on specified grounds — serious illness, higher education, a change of residency — at a reduced rate.

Sukanya Samriddhi runs for twenty-one years from opening, with deposits for the first fifteen. Up to half the balance can be withdrawn for the girl’s education once she turns eighteen or passes the tenth standard, and the account can be closed on her marriage after eighteen.

A fixed deposit runs for the term booked, anywhere from a week to ten years. It can be broken early, at a penalty the bank sets — usually a lower rate for the period actually run. A tax-saving fixed deposit is the exception: a five-year lock-in with no early withdrawal.

How much can go in

PPF takes between ₹500 and ₹1.5 lakh a financial year; Sukanya Samriddhi between ₹250 and ₹1.5 lakh. A fixed deposit takes whatever the bank accepts, from its own minimum upward, with no ceiling.

How the interest is set

PPF and Sukanya Samriddhi interest is notified by the Ministry of Finance for each quarter, applies to the balance for that quarter, and is compounded and credited yearly; the current rate is on the National Savings Institute’s pages, and it changes, so no figure is printed here. A fixed deposit’s rate is whatever the bank offers on the day it is booked, for that term and that amount, and it stays fixed to maturity; banks pay higher rates for longer terms and to senior citizens, and change their tables at will for new deposits.

How the interest is taxed

PPF and Sukanya Samriddhi deposits qualify for the deduction under section 80C — within its overall ceiling, and only for a taxpayer on the old regime — and the interest and the maturity amount are exempt from tax (Income Tax Department). Fixed-deposit interest is taxable as income from other sources in the year it accrues, and the bank deducts tax at source above a yearly threshold unless a declaration is filed; only the five-year tax-saving deposit qualifies for 80C, and its interest is taxable like any other.

How safe the money is

A PPF or Sukanya Samriddhi balance is owed by the Government of India. A fixed deposit is owed by the bank, and the Deposit Insurance and Credit Guarantee Corporation insures deposits up to ₹5 lakh per depositor per bank, principal and interest together, across all that depositor’s accounts in that bank. Deposits above that amount in one bank are not insured.

Reading the comparison

The three answer different questions. PPF is a long lock-in with tax-free interest, for a resident saving in their own name. Sukanya Samriddhi is the same shape for a daughter, with its own timetable. A fixed deposit is liquid, flexible in amount and term, bank-rated and taxable. Which combination suits a household depends on when the money will be needed and what tax regime the household is on — questions this guide does not answer. What it can do is point to the three official pages above, where the rules and the rates in force are kept current.