Public Provident Fund Vs. Sukanya Samriddhi Yojana

Sukanya Samriddhi Yojana is a government-backed modest savings scheme available at post offices and recognised public and private sector banks. It's one of the most profitable fixed-income investment options. If you are the parent of a girl under the age of 10, you can open an SSY account in her name.

The Public Provident Fund (PPF) is a well-known long-term investment that allows people to put money aside for retirement. It boasts high interest rates and offers a plethora of tax benefits, tax exemptions, and capital security. The income tax does not apply to the interest and returns earned. It has recently risen to prominence as one of the most effective tax-cutting strategies. PPFs have a high interest rate as well as a bevvy of tax benefits.

Sukanya Samriddhi Yojana (SSY) and Public Provident Fund (PPF) Schemes: Key Features

To help you determine which is best for you and your child, below are some essential characteristics and criteria of the Sukanya Samriddhi Yojana (SSY) and Public Provident Fund (PPF) plans.

1. Eligibility Criteria

The guardian might open a Sukanya Samriddhi account in the name of the girl kid. Anyone above the age of 10 can open a bank account. A PPF account, on the other hand, can be opened by a resident of India who is not an NRI. PPF requires that you be 18 years old to apply. It is suitable for both boys and girls to open.

2. Deposit Limit

Both plans can be established with a small amount of money; the minimum deposit amount for PPF is Rs.500 and the maximum deposit amount is Rs.1,50,000. Sukanya Samriddhi Account, on the other hand, has a minimum deposit requirement of Rs.250 and a maximum deposit limit of Rs.1,50,000.

3. Provided Interest Rate

Interest rates for both saving programmes are not always the same and fluctuate during the fiscal year based on government policy. The government creates and reviews the return on a regular basis. For the third quarter (October-December) of fiscal year 2020-21, an SSY Account currently offers a 7.6% interest rate. The PPF interest rate is set at 7.1 percent for the third quarter of 2020 (October-December).

4. Benefits from Taxes

Section 80(C) of the Income Tax Act of 1961 exempts PPF investments from taxation.
As a result, the interest earned is tax-free at the time of maturity. Sukanya Samriddhi Sukanya Samriddhi Sukanya Samridd This category also includes accounts, which are eligible for exclusions under Section 80C of the Act. The accumulating interest, as well as the final amount due at maturity, are both tax-free.

5. Withdrawals 

PPF withdrawals can be made in full or in part when six fiscal years have passed since the account was opened. However, to properly appreciate the partial withdrawal process, it is essential that one speak with a certain bank. Withdrawals from the Sukanya Samriddhi Account are only permitted once the girl child has reached the age of 18, and the funds can be used for further education.

6. Account Maturity 

PPF accounts have a 15-year duration that begins at the end of the fiscal year in which they were issued. On the other hand, a Sukanya Samriddhi Account develops when the girl child reaches the age of 21.

7. Facility for Loan

Investors can apply for PPF loans, which can help you get over a temporary financial setback. SSA, on the other hand, does not have access to this facility.

Conclusion

Both the Sukanya Samriddhi Yojana (SSY) and the Public Provident Fund (PPF) are tremendously beneficial government-sponsored schemes. Both offer benefits and drawbacks, making it tough to choose between the two. A Sukanya Samriddhi Account or a Public Provident Fund is a compromise between freedom and higher returns. PPF offers greater flexibility, but SSA offers higher yields. You can split your money between the two schemes if you have extra money to invest.

Also Read: The Benefits And Drawbacks Of Purchasing A Child Plan

Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.