Public Provident Fund vs. Sukanya Samriddhi Yojana!
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Sukanya Samriddhi Yojana is a government-backed modest savings plan that may be accessed through post offices or authorized public and private sector banks. It is one of the most lucrative fixed-income investing alternatives. You can establish an SSY account in the name of a girl under the age of ten if you are her parent.
The Public Provident Fund is a popular long-term investment that allows people to save for their retirement. It has high-interest rates and is filled with tax advantages, tax exemption, and capital security. The interest and returns generated are not taxed under the Income Tax. It has recently become one of the most effective tax-saving tools. PPF has a high-interest rate and a slew of tax advantages.
Sukanya Samriddhi Yojana (SSY) Vs. Public Provident Fund (PPF) schemes
Here are some key characteristics and criteria of the Sukanya Samriddhi Yojana (SSY) and Public Provident Fund (PPF) schemes to help you decide which is best for you and your child.
1. Basis of Eligibility
Sukanya Samriddhi Account can be opened by the guardian, in the name of the girl child. The account can be opened by anybody above the age of ten. Whereas, A PPF account can be opened by a resident of India who is not an NRI. The entrance age for PPF is 18 years. It can be opened by both boys or girls.
2. Deposit Limit
Both plans may be started with relatively little money; for PPF, the lowest deposit amount is Rs.500 and the highest is Rs.1,50,000. Sukanya Samriddhi Account, on the other hand, requires a minimum deposit of Rs.250 and a maximum limit of Rs.1,50,000.
3. Interest Rate Provided
The interest rates for both saving plans are not always the same and change during the fiscal year as determined by the government. The return is established and reviewed periodically by the government. An SSY Account presently offers a 7.6 percent interest rate for the third quarter (October-December) of the fiscal year 2020-21. The PPF interest rate for the third quarter of 2020 (October-December) is set at 7.1 percent.
4. Tax Benefits
PPF investments are free from taxation under Section 80(C) of the Income Tax Act of 1961. As a result, the interest earned at the time of maturity is tax-free. Sukanya Samriddhi Accounts are likewise included in this category and are eligible for exclusions under Section 80C of the Act. The accumulated interest and the final amount at maturity are likewise tax-free.
5. Withdrawal
PPF withdrawals can be done in full or in part after the completion of six fiscal years from the date the account was opened. However, it is recommended that one consult with a particular bank to fully comprehend the partial withdrawal process. Withdrawals from the Sukanya Samriddhi Account are permitted only once the girl child reaches the age of 18 and can be used for further education.
6. Account Maturity
A PPF account has a 15-year term beginning with the end of the fiscal year in which it was issued. A Sukanya Samriddhi Account, on the other hand, matures when the girl child reaches the age of 21.
7. Loan Facility
PPF loans are available to investors, and they can assist you to get through a brief financial problem. This facility, however, is not available to SSA.
Conclusion
Sukanya Samriddhi Yojana (SSY) and Public Provident Fund (PPF) are both extremely advantageous and entirely government-backed programs. Both have advantages and downsides, making it difficult to pick between them. Selecting between a Sukanya Samriddhi Account and a Public Provident Fund is a compromise between flexibility and greater rewards. PPF provides more flexibility, but SSA provides larger returns. If you have extra money that you wish to invest, you can split it between the two plans.
Also read- Examining The Importance Of The SBI Child Education Plan.
