PPF vs SSY

The Public Provident Fund (PPF) and Sukanya Samriddhi Yojana are two popular investment schemes backed by the Government of India. Therefore, any contributions made in these schemes are safe and secure. While the Sukanya Samriddhi Yojana aims to secure the future of a girl child, the PPF is a scheme that allows investors to earn tax-free interest.

Sukanya Samriddhi Yojana was launched in 2015 for parents of girl children to build an emergency fund for the education of girl child and marriage expenses. Parents or guardians can invest in the SSY scheme for the girl child aged 10 years or below for a tenure upto 21 years.

Here are some features and benefits of opening an account in Sukanya Samriddhi Yojana.

Minimum deposit amount: To invest in an SSY scheme, parents or legal guardians need to make a minimum investment of ₹ 1,000 and can invest upto ₹ 1.50 Lakh every year.

Tax Benefits: SSY comes with EEE (exempt, exempt, exempt) tax feature, where the principal amount invested, interest earned, and the amount received at maturity allows tax exemptions.

Interest Rate: You can earn interest on Sukanya Samriddhi Yojana account at an interest rate of 8.50%.

Withdrawal: The beneficiary can withdraw upto 50% of the funds for educational purposes as the girl attains the age of 18 years.

The main eligibility criteria to open the SSY account are mentioned below:

• A legal guardian or parent can open the SSY account on behalf of a girl child until she attains the age of 10 years.
• The girl child must be AN Indian citizen.
• Up to two accounts can be opened for two girls in a family.
• A third SSY can be opened in case there are twin girls in a family.

Here are the documents that you need to submit to open Sukanya Samriddhi account:

• SSY account opening form.
• The birth certificate of the girl child needs to be submitted
• Address proof and ID proof of the depositor must be submitted at the time of opening the account.
• In case multiple children are born under one order of birth, a medical certificate has to be submitted
• Other documents that are requested by the bank or post office.

A public provident fund is a government backed scheme that aims to mobilize the small savings and get high returns with tax benefits in the long term.

Here are some features and benefits of investing in PPF scheme:

Minimum deposit: To open a PPF account, you need to deposit ₹ 100 in your PPF account and a minimum investment of ₹ 500 is required to keep the PPF account active. The maximum limit of investing in PPF accounts is ₹ 1,50,000 in a fiscal year.

Tax Benefits: PPF is Exempt-Exempt-Exempt scheme, that means there are tax exemptions on the principal amount, interest earned, and the amount received at the end of maturity.

Interest Rates: The PPF returns are not subject to any market risks and determined by the government. Presently, the rate of interest on PPF is 7.10%.

Loan against PPF: You can also avail a loan against PPF from the third financial year till the end of the sixth financial year at 1%-2% higher than PPF rates.

The main criteria to open the Public Provident Fund are mentioned below:

• A resident of India is eligible to open a PPF account.
• Only one account can be opened by an individual under his/her name
• Another account can be opened by the individual on behalf of a minor
• Hindu Undivided Families (HUFs) and Non-resident Indians (NRIs) are not allowed to open a PPF account

These are the documents that you require for opening a PPF account:

• PPF account opening form
• Identity Proof
• Proof of Residence
• Photograph of the account holder
• Signature Proof

In the table given below, we have mentioned the main features of the Sukanya Samriddhi Yojana (SSY) and Public Provident Fund (PPF) schemes:

Features	Sukanya Samriddhi Yojana	Public Provident Fund
Objective	The main objective of SSY is to secure the future of a girl child	The main objective of the PPF scheme is to provide good returns in the long run
Who can open the account?	The parent or legal guardian can open an account on behalf of a girl child	An Indian resident can open the account
Age criteria	SSY can be opened under the name of a girl child until she attains the age of 10.	PPF account can be opened on behalf of a minor as well
Number of accounts	Only one account can be opened under a girl child’s name. A maximum of two accounts can be opened for a family in case there are two girls.	Only one account can be opened under an individual’s name
Deposits	The minimum amount that can be deposited is ₹ 250 and maximum can be up to ₹ 1.50 Lakh	The minimum amount is ₹ 500 and maximum amount is ₹ 1.50 Lakh in a year.
Maturity period	The tenure of the scheme is 21 years or until the girl attains the age of 18 years	The lock-in period of the scheme is 15 years
Interest rate	The rate of interest offered is 7.6% per annum and it is compounded on a yearly basis	The rate of interest is 7.1% currently and it is compounded on a yearly basis
Opening of account	An individual can open the account with post offices or banks that offer SSY	An individual can open the account with post offices or banks that offer PPF
Mode of deposit	Cheque, demand draft or cash	Cheque, demand draft, online transfer or cash
Tax benefits	Tax benefits of up to ₹ 1.50 Lakh can be availed under Section 80C of the Income Tax Act	Tax benefits of up to ₹ 1.50 Lakh can be availed under Section 80C of the Income Tax Act
Withdrawal	Complete withdrawal is allowed only after the girl attains the age of 18	Complete withdrawal is allowed after maturity of deposit
Transfer of account	The account can be transferred from a post office to bank and vice versa.	The account can be transferred from a post office to bank and vice versa.
Partial Withdrawal	The maximum amount that can be withdrawn is 50% of the amount that is available in the previous year. It can be withdrawn for the purpose of education or marriage of the girl child but only after she attains the age of 18 years.	Up to 50% of the amount can be withdrawn after 6 years are completed from the date the account was opened.

So, now you know all about Sukanya Samriddhi Yojana and Public Provident Fund. If you are looking for a plan to secure your girl child’s future, then SSY is the best option with higher returns and tax benefits. On the other hand, if you’re looking for an investment scheme with good returns in the long run, then PPF is an option you can consider.

✅Can I open both PPF and Sukanya Samriddhi Accounts?

Yes, you can open both PPF and Sukanya Samriddhi Accounts. While an SSY account can be opened for girl child aged 10 years or below, you can open a PPF account if you are an Indian resident above the age of 18 years.

✅ Which gives more interest PPF or Sukanya Samriddhi Account?

Presently, the PPF interests as revised on 1st April, 2022 are 7.10%, and you can get 8.50% on your SSY accounts.

✅ Who should choose PPF?

If you’re looking for an investment scheme with good returns in the long run along with tax benefits, then you should invest in PPF.

✅Who should choose the Sukanya Samriddhi account?

SSY is an ideal option if you are looking for a plan to secure your girl child’s future, that provides higher returns and tax benefits.