There are a host of private institutions offering good investment avenues. However, public sector is also not left behind in introducing best investment options with higher returns. And when it comes to offering the safest investment avenues, two options that has been gaining popularity eventually are Sukanya Samridhi Yojana (SSY) and Public Provident Fund (PPF).
SSY v/s PPF
Both the schemes are introduced by the Government of India for long-term investment goals. As they are owned by the government, the returns are fully secured and eligible for earning tax benefits as well. Having said that it is prudent to know a bit of these investments before parking your money into them.
- Sukanya Samriddhi Yojana: When it comes to securing a safe future of a girl child, there is no better option than Sukanya Samriddhi Yojana. Launched in the year 2015 under the campaign “Beti Bachao Beti Padhao”, the scheme encourages to save a considerable portion for the girl’s future. One can also save on tax up to Rs 1.5 lakh under Section 80C of the Income Tax Act. The applicable rate of interest for the year 2020 is 8.4%, on a compounded basis. The minimum deposits start from Rs 250 and can go up to the maximum of Rs 1.5 lakh in a year.
- Public Provident Fund: PPFs aim at mobilize small savings and offer higher returns along with tax benefits. A minimum investment of Rs 500 is necessary to open an account where one can invest up to a maximum of Rs 1.5 lakh in a year. The account matures in a duration of 15 years, where the returns are offered at a rate of interest 7.9%.
SSY v/s PPF Account: Key Highlights
Not to mention, there are some alluring features that make them highly preferred investment options over the others. Some of the key highlights of these investment tools are:
||Sukanya Samridhi Yojana
||Public Provident Fund
|Who can open
||A parent of a girl child
||An Indian citizen can apply. Minor accounts are also available
||Rs 1.5 lakh
||Rs 1.5 lakh
||Till the girls turns 10 years
||No upper age limit
|Rate of Interest
Sukanya Samridhi Yojana (SSY) Vs Public Provident Fund (PPF)
Despite being the govt.-owned investment schemes, these accounts differ from each other in many ways:
- While Sukanya Samridhi Yojana Account is opened by the parents in the name of the girl child, PPF account can be opened by anyone who is a citizen of India.
- The rate of interest for both keeps changing as they are linked to government security and it is reviewed by every quarter. The current ROI in SSY is 8.4%, where the calculation is done basis on the balance in the account in 10th and the end of the day in the month. So, in case of SSY, investments should be done before 10th, every month.
On the other hand, the offered ROI in PPF for current year is 7.9%, where the calculation is done based on the lowest balance available in the account in 5th to the last day of the month.
- In case of deposits as well, the schemes differ from each other. SSY requires minimum deposit of Rs 250 to open an account. While in PPF, it is Rs 500. However, the maximum limit for both schemes is same i.e. Rs 1.5 lakh.
- On the basis of the maturity, both these schemes remain different. The maturity period for SSY is 21 years, while it is 15 years of PPF account.
- Sukanya Samridhi Yojana Account allows partial withdrawals once the girl child attains the age of 18 years up to 50% of the total balance in the account. In case of PPF, one can withdraw up to 50% of the account balance after 5 years from the date of account opening.
- PPF account comes with nominee option, which is not applicable in case of Sukanya Samridhi Yojana.
- A maximum of two accounts can be opened in case of SSY, one account for each girl child. But under PPF account, a person can open only one account.
- In terms of premature closure, both the schemes differ from each other. SSY allows premature withdrawals in unavoidable conditions such as untimely demise of the account holder, if someone is unable to continue on the logical grounds etc. On the other hand, PPF account can be withdrawn before it matures after 5 years under the grounds such as treatment of deadly diseases, higher education etc.