The Public Provident Fund (PPF) and Sukanya Samriddhi Yojana (SSY) are 2 tax-efficient government savings schemes coming with attractive interest rates to help plan long-term returns. However, SSY offers higher interest rates compared to PPF under a clause i.e. it can be opened only if you have a girl child.

Hence, before making any investment decisions, it is important to analyze the 2 schemes and their specific details, thoroughly. It is essential to take into account factors such as financial goals, potential returns, interest rates, and the associated risks that shape a portfolio.

Here's a guide to help you decide between the Sukanya Samriddhi Yojana and PPF for efficient investment decisions.

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Sukanya Samriddhi Yojana (SSY)

The Sukanya Samriddhi Yojana (SSY) is a government-backed savings scheme in India specifically designed for the girl child. It was launched in 2015 as part of the Beti Bachao Beti Padhao campaign, which aims to empower girls and improve their sex ratio in the country. The SSY account can be opened for a girl child up to the age of 10 years. The account matures 21 years from the date of account opening or upon the girl child turning 21 years of age, whichever is earlier.

Public Provident Fund (PPF)

The Public Provident Fund, also referred to as PPF, is a long-term investment scheme with fixed returns available to all individuals. It was established by the Finance Ministry in 1968 to encourage savings among the general public. Under this scheme, the central government provides a fixed interest rate on the amount invested is compounded annually upon the minimum balance available in the PPF account. It is done so on the 5th and the end of each month.

Difference Between Sukanya Samriddhi Yojana & PPF

The tables below show the key characteristics and factors of the Sukanya Samriddhi Yojana (SSY) and the Public Provident Fund (PPF) scheme that can assist you in distinguishing between the two and selecting the most suitable option for you and your child.

Parameters Sukanya Samriddhi Yojana (SSY) Public Provident Fund (PPF)
Objective Secure girl child's future Provide good long-term returns
Rate of Interest 7.6% p.a. 7.1% p.a.
Amount Payable on entry ₹1,000/- ₹100/-
Minimum Deposit ₹250/- ₹500/-
Maximum Deposit ₹1,50,000/- ₹1,50,000/-

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Note: As the value of investments may fluctuate based on market conditions, SSY offers guaranteed returns under the backing of the Government of India.

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PPF Calculator

Calculating the potential maturity amount can be a complex process, but with the help of a PPF calculator, the task becomes much simpler.

Here are the steps to use the PPF calculator:

Step 1: Total investment: Enter the amount you plan to invest in your PPF account annually or monthly.

Step 2: Input the Interest Rate (p.a.): Enter the current interest rate applicable to the PPF account.

Step 3: Input the Tenure (in years): Enter the number of years you plan to invest in the PPF account.

Sukanya Samriddhi Yojana Calculator

The SSY calculator will then provide you with the estimated maturity value of your Sukanya Samriddhi Yojana investment, taking into account the interest rate, investment duration, and compounding effect. This tool allows you to plan and manage your daughter's financial future with ease and confidence.

250 1,50,000
1 10

Investment term is 21 years

2015 2030
Total Invested :  ₹1,50,000
Total Interest :  ₹3,25,825
Maturity Year :  2042
Maturity Value :  ₹4,75,825

Here are steps to use the SSY calculator:

Step 1: Yearly Investment Amount: Enter the amount you plan to invest annually in the SSY account.

Step 2: Girl’s Age: The current age of the girl child for whom the SSY account is being opened.

Step 3: Start Period: The year you want to begin the investment in the SSY account.

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Steps to Open Sukanya Samriddhi Yojana Account

Investing in the Sukanya Samriddhi Yojana is an excellent way to save and accumulate funds to secure the future of girl children. You can open an SSY account both online and offline.

Here are the steps to open an SSY account online:

Step 1: Visit the official website of the bank or post office offering SSY.

Step 2: Fill in the online application form with the required details.

Step 3: Upload the necessary documents.

Step 4: Make the initial deposit online.

Here are the steps to open an SSY account offline:

Step 1: Visit the nearest authorized bank or post office that offers the Sukanya Samriddhi Yojana.

Step 2: Obtain the SSY account opening form.

Step 3: Fill in the form with the required details.

Step 4: Attach the necessary documents.

Step 5: Submit the form and make the initial deposit.

Steps to Open a PPF Account

You can open a Public Provident Fund (PPF) account either online or offline at any authorized private or public bank or a Post Office. The account opening process may vary from one bank to another, so it's recommended to check the website or visit the nearest branch for a better understanding.

Here are the steps to open an SSY account online:

Step 1: Visit the nearest Bank or Post Office branch.

Step 2: Fill up the PPF application form and submit the required KYC documents.

Step 3: Make the initial deposit.

Step 4: Once the deposit is received, the applicant will get a passbook for the PPF account containing all the details.

Here are the steps to open a PPF account online:

Step 1: Visit the website of any bank or post office.

Step 2: Navigate to the PPF section.

Step 3: Enter the necessary details and upload your KYC documents if required.

Step 4: Verify your PAN and other details.

Step 5: Enter the initial deposit amount.

Step 6: Choose whether the amount will be deducted at regular intervals or in a lump sum.

Step 7: Enter the OTP you receive on your mobile.

Step 8: After verifying your details, the account will be opened.

Tax Benefits of SSY & PPF

Both the Sukanya Samriddhi Yojana (SSY) and the Public Provident Fund (PPF) offer significant tax benefits that make them attractive investment options. Here's a breakdown of how they match up:

  • Exempt on Investment: The amount you contribute towards SSY or PPF is eligible for a tax deduction under Section 80C of the Income Tax Act, up to a maximum of ₹1.5 lakh per annum.
  • Exempt on Interest: The interest earned on your SSY or PPF account is not taxed throughout the investment period.
  • Exempt on Maturity: The maturity amount you receive from your SSY or PPF account is completely tax-free.

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Frequently Asked Questions

Sukanya Samriddhi Yojana (SSY) and the Public Provident Fund (PPF) are government-backed schemes that offer significant benefits. Each scheme has its pros and cons, making it difficult to decide between them. If you have substantial savings and are looking for a secure investment for the future, you may consider investing in both schemes. Ultimately, the responsibility lies with you to safeguard yourself and your loved ones.

Yes, you can invest up to ₹1.5 lakhs per annum in both PPF and SSY accounts, subject to the overall investment limit of ₹1.5 lakhs per financial year under Section 80C of the Income Tax Act.

There is no investment scheme that is universally "better" than SSY. However, other options like mutual funds, fixed deposits, and life insurance policies may also be considered, depending on your risk appetite and financial goals.

The Sukanya Samriddhi Yojana (SSY) is widely considered the best investment scheme specifically designed for the girl child in India. It offers attractive interest rates, tax benefits, and a long-term savings horizon to secure the future of the girl child.

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