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Public Provident Fund vs Sukanya Samriddhi Yojana: If you prioritise higher returns and long-term savings for a girl child, SSY is the better choice. However, if you need flexibility and access to funds in between, PPF is the ideal option
Many people choose PPF or SSY for safe investments and good returns. However, confusion prevails about which one provides greater benefits. (AI Generated)
Public Provident Fund (PPF) and Sukanya Samriddhi Yojana (SSY) are both long-term, government-backed schemes that offer tax exemptions and financial security. Many people choose PPF or SSY for safe investments and good returns. However, confusion prevails about which one provides greater benefits. If you are also confused about which one gives a better interest rate, here is a quick comparison of the two schemes:
Public Provident Fund (PPF) Key Features:
Interest Rate: 7.1% (As of January 2024)
Deposit Limit: Minimum Rs 500, maximum Rs 1.5 lakh per year
Who Can Invest: Any Indian citizen
Suitable For: Those seeking a safe investment with the flexibility of mid-term withdrawals.
Tax Benefits: Tax exemption under Section 80C; interest and maturity amount are fully tax-free.
Withdrawal Rules: 50% of the amount can be withdrawn after 5 years. Full amount is available after 15 years. In emergencies, the account can be closed after 5 years (with a 1% penalty).
Amount Available After 15 Years:
Total Investment: Rs 18 lakh
Interest Earned: Rs 14.54 lakh
Total Maturity Amount: Rs 32.54 lakh
Sukanya Samriddhi Yojana (SSY) Key Features:
Interest Rate: 8.2% (As of January 2024)
Deposit Limit: Minimum Rs 250, maximum Rs 1.5 lakh per year
Who Can Invest: Parents of a girl child (before she turns 10 years old)
Suitable For: Those looking to secure the future of their girl child.
Tax Benefits: Tax exemption under Section 80C; interest and maturity amount are fully tax-free.
Withdrawal Rules: 50% of the amount can be withdrawn for higher education after the girl turns 18. Full amount is available after 21 years. The account can be closed in case of an emergency.
Amount Available After 15 Years:
Total Investment: Rs 18 lakh
Interest Earned: Rs 37.42 lakh
Total Maturity Amount: Rs 55.42 lakh
PPF vs SSY
Both PPF and SSY are secure investment options, but they have key differences:
- PPF is open to everyone and allows mid-term withdrawals.
- SSY offers higher interest rates but has stricter withdrawal rules.
- PPF can be extended after 15 years, while SSY matures after 21 years.
- SSY is exclusively for girls, whereas PPF is available to all.
- SSY offers higher returns, making it more beneficial for a girl’s future.
- PPF is a better option for those seeking liquidity and security, while SSY is ideal for long-term, high-yield savings.
If you prioritise higher returns and long-term savings for a girl child, SSY is the better choice. However, if you need flexibility and access to funds in between, PPF is the ideal option.
