Sukanya Samriddhi Yojana vs Public Provident Fund

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The government of India has launched many schemes and policies with time to facilitate savings and cater to different financial requirements of every individual as per their need.

Sukanya Samriddhi Yojana (SSY) and Public Provident Fund (PPF) are one of the 2 very promising and safe investment options provided by the Government of India. These 2 policies are the safest investment options available with substantial financial growth. So, the question arises that which policy is better for your girl child’s secure future?

Let us understand intensively about both Sukanya Samriddhi Yojana (SSY) and Public Provident Fund (PPF) that will help you make an informed decision as to what is best for you and your child.

Sukanya Samriddhi Yojana (SSY) v/s Public Provident Fund (PPF)

Both PPF (Public Provident Scheme) and SSY (Sukanya Samriddhi Yojana) accounts are very popular schemes for saving. These schemes allow you to accumulate a corpus over a time and offers guaranteed tax-free returns. However, SSY accounts can only be opened in a girl child’s name, while any individual can have 1 PPF account in his or her name. 

Here are some main features and parameters of Sukanya Samriddhi Yojana (SSY) and Public Provident Fund (PPF) scheme that will help you differentiate between the 2 and choose the one best suited for you and your child.

Parameters

Here are some of the main parameters of Sukanya Samriddhi Yojana and Public Provident Fund account:

Parameters Sukanya Samriddhi Yojana Account Public Provident Fund
Rate of Interest 7.6% (Q1 FY 2021-22) 7.1% (Q1 FY 2021-22)
Entry Age By Birth 15 Years
Amount Payable on entry Rs.1,000/- Rs.100/-
Minimum Deposit Rs.250/- Rs.500/-
Maximum Deposit Rs.1,50,000/- Rs.1,50,000/-
Tax Benefit Rs.1,50,000/- Rs.1,50,000/-
Maturity 21 years or after marriage 15 years
Premature Termination After the age of 18 After 5 financial years
Nomination No Yes
Loan No Yes

One of the major points is that in case of maturity of SSY account, policyholder will face problems in re-investing the accrued amount in any other investment scheme that is tax-free. The maximum amount that is allowed to be invested in PPF scheme for tax saving purpose u/s 80C is Rs 1,50,000/ year. However, if you will require the accrued corpus for additional expenses such as higher education or marriage, the savings of SSY would be useful in future. 

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Features

Here are some detailed features of Sukanya Samriddhi Yojana and Public Provident Funds account:

Features Sukanya Samriddhi Yojana PPF
Objective To secure the future of girl child To provide good returns over the long run
Who can open an account? The parent/legal guardian on behalf of their girl child Any individual who is a resident of India. Can be opened on behalf of minor as well
Number of accounts One account per girl child. Maximum 2 in the family One account in the name of any individual
Age criteria Sukanya Samriddhi Yojana account can be opened till the girl child is 10 years Public Provident Fund can be opened at any age and for minors as well
Maturity period Tenure of 21 years or until the girl child is married after the age of 18 The lock-in period of the scheme is 15 years
Minimum Deposit A minimum of Rs. 250 can be deposited every year A minimum of Rs. 500 can be deposited every year
Maximum Deposit A maximum of Rs. 1,50,000 can be deposited every year A maximum of Rs. 1,50,000 can be deposited every year
Tax benefits Tax benefits of up to 1,50,000 Rupees can be availed for a contribution made towards the scheme under Section 80C of the Income Tax Act. Tax benefits of up to 1,50,000 Rupees can be availed for a contribution made towards the scheme under Section 80C of the Income Tax Act.
Rate of interest 7.6% per annum rate of interest compounded annually 7.1% per annum rate of interest compounded annually
Mode of deposit Cheque, demand draft, or cash. Online transfer into Sukanya Samriddhi Post Office Account also available Cheque, demand draft, cash or online transfer available
Opening of account Sukanya Samriddhi Yojana account can be in Post Office or 28 other banks that offer SSY Public Provident Fund account can be in Post Office or other banks that offer PPF
Transfer of account Can be transferred from bank to Post Office and vice versa Can be transferred from bank to Post Office and vice versa
Withdrawal Complete withdrawal only after the marriage of girl child or completion of 21 years Complete withdrawal only after the date of maturity
Partial withdrawal After completing 18 years of age, up to 50% of the amount can be partially withdrawn for the purpose of either further education or marriage Only after completing 6 years of account opening, up to 50% amount can be withdrawn

These key benefits and parameters will help you a lot to decide which government-backed scheme to choose for your child to make their future safe and secure.

If you feel like buying any of the 2 schemes, that is, Sukanya Samriddhi Yojana (SSY) or Public Provident Fund (PPF), here is how you can open the account and a list of some basic documents required to open the following accounts:

Child Plan versus Sukanya Samriddhi Yojana and PPF

How To Open Sukanya Samriddhi Yojana (SSY) Account

  1. Offline

    There are 2 ways to open Sukanya Samriddhi Yojana offline, that is, with the bank or at the post office.

    • Visit the post office/ bank

    • Fill in the Sukanya Samriddhi Yojana application form with the details of your daughter

    • Take birth certificate, aadhaar card, pan card, and all other necessary documents of the child with you

    • After verification, your account will be opened and the passbook will be handed over to the parents/ legal guardian of the girl child

  2. Online

    Much easier than directly visiting the bank branch, to open your Sukanya Samriddhi Yojana account online, all you have to do is

    • Check the official website of the bank you wish to have an account with

    • Fill in all the required information of the child and the parents in the form as required

    • Attach scanned copies of all the mentioned certificates and address proofs

    • Click on the submit button and your Sukanya Samriddhi Yojana is good to go.

    It is your choice how you would like to open your child’s Sukanya Samriddhi Yojana account.

People also read: Sukanya Samriddhi Yojana Calculator

Documents Required To Open Sukanya Samriddhi Yojana Account

  • Sukanya Samriddhi Yojana opening form

  • Birth certificate of the girl child

  • Address and identification proof of the parent or legal guardian

  • Other documents requested by Post Office or by your bank

How To Open Public Provident Fund (PPF) Account? 

Here are some simple steps to open Public Provident Fund (PPF) account

  • Fill in the application form

  • PPF account opening form (Form A) available at your nearest Post Office or online

  • Submit the form with the required KYC details

  • Make the initial deposit for account opening. It can be from Rs. 500 to Rs. 1,50,000

  • Once the process is complete, a passbook would be handed over to you

  • Your PPF account is now fully-functioning

Documents Required to Open Public Provident Fund (PPF) Account

  • PPF account opening form

  • Nomination form

  • Passport size photograph

  • Pan card, Aadhaar card

  • ID proof and residence proof as per KYC norms

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Wrapping it up

Sukanya Samriddhi Yojana (SSY) Public Provident Fund (PPF) are highly beneficial and completely Government-backed schemes. Both of them have their advantages and disadvantages making it tough to choose. You can go for both of the schemes if you have a good amount of savings and want to invest in something that will surely be fruitful in the future. Ultimately, it is you who has to protect yourself and your loved ones!

*All savings are provided by the insurer as per the IRDAI approved insurance plan.
*Tax benefit is subject to changes in tax laws. Standard T&C Apply
^The tax benefits under Section 80C allow a deduction of up to ₹1.5 lakhs from the taxable income per year and 10(10D) tax benefits are for investments made up to ₹2.5 Lakhs/ year for policies bought after 1 Feb 2021. Tax benefits and savings are subject to changes in tax laws.
#The lumpsum benefit is calculated if policyholder invested ₹10000 monthly for 10 years in the fund with a policy term of 20 years. This Point To Point past performance data of last 10 years has been used to illustrate a scenario for the customers benefit. It is assumed that the past 10 years returns would have also been delivered in last 20 years. This is not guaranteed and not in anyway indicative of what the customer may actually get 20 years from now. The investment is subject to market risk and the risk is borne by the policyholder.
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^^The information relating to mutual funds presented in this article is for educational purpose only and is not meant for sale. Investment is subject to market risks and the risk is borne by the investor. Please consult your financial advisor before planning your investments.

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