PPF vs Sukanya Samriddhi: Which one is better investment scheme for your daughter?

Both Sukanya Samriddhi and PPF are long term investments. Sukanya Samriddhi Yojana is specially meant to protect the future of daughters, while PPF also secures the future by collecting a hefty corpus in the long term, but when it comes to choosing one of the two investments, it is a bit difficult decision. In this story, you will know about the advantages and disadvantages of both these schemes so that you can make a better choice.

Sukanya Samriddhi Yojana (SSY)

This scheme has been started under 'Beti Bachao, Beti Padhao'. It can be started by parents of a girl child below 10 years of age and parents can avail this scheme for two daughters of the family. The tenure of these accounts is 21 years or till the marriage of the daughter after the age of 18 years.

This scheme was launched in 2014, at an interest rate of 9.1%. Later, this interest rate was hiked to 9.2 percent. From there, the scheme has seen a continuous downward trend in its interest rates. At present, 7.6% interest was available till the financial year 2020-21, which has been extended till the July-September quarter.

Interest Rate (Percent)

• July-September 2021 7.6
• April-2020 to March 2021 7.6
• July-September 2019 8.4
• April to June 2019 8.5
• January to March 2019 8.5
• October to December 2018 8.5
• July to September 2018 8.1
• April to June 2018 8.1
• January to March 2018 8.1
• October to December 2017 8.3
• July to September 2017 8.3
• April to June 2017 8.4

Eligibility for SSY account

If you want to start investing in Sukanya Samriddhi Yojana for your daughter, you should know its conditions.

1. Sukanya Samriddhi Account can be opened by the parents or legal guardians in the name of the girl child only
2. The girl child should be less than 10 years of age at the time of account opening
3. Only one account can be opened for a daughter
4. Only two SSY accounts are allowed for a family

How to invest in Sukanya Samriddhi Yojana

You can invest in this scheme through a post office near you or the branches of government and private banks involved in it. For this, you will have to submit KYC documents like passport, Aadhar card etc. along with the required form and initial deposit through cheque/draft. Apart from banks, you can also download the new account application form for SSY from the RBI website. You can download the form from the website of The India Post, public sector banks SBI, PNB, BOB etc. You will also get the form from private sector banks like ICICI Bank, Axis Bank and HDFC Bank.

In Sukanya Samriddhi Account, you can deposit Rs 250 in a financial year and invest up to a maximum of 1.5 lakhs. You have to deposit at least the prescribed minimum investment amount every year for 15 years from the date of account opening. After this, interest will continue to accrue till the maturity of the account. The duration of Sukanya Samriddhi Yojana is 21 years or till the girl gets married after she turns 18. The daughter can withdraw some money from the Sukanya Samridhi account after the age of 18 for the expenses of her higher education, but this withdrawal cannot be more than 50%.

Benefits of investing in Sukanya Samriddhi Yojana

On investing in this scheme, the parents of the daughter get income tax exemption. Under Section 80C of Income Tax, the benefit of tax exemption is available up to Rs 1.5 lakh annually.

Investment and interest rates in PPF

Public Provident Fund (PPF) is a tax-free savings scheme, whose interest rates are fixed every quarter like SSY. As far as its comparison with Sukanya Samriddhi is concerned, there is a lot of difference between the features of both. Any person can open an account in PPF, whereas SSY is a scheme run only for daughters.

Interest rates

• Sukanya Samriddhi 7.6%
• PPF 7.1%

Initial investment amount

• Sukanya Samriddhi Rs 1000
• PPF Rs 100

Minimum investment

• Sukanya Samriddhi Rs 250
• PPF Rs 500

Tax benefit

• Sukanya Samriddhi Rs 1.5 lakh
• PPF 1.5 lakhs

Maturity

• Sukanya Samriddhi 21 Years
• PPF 15 Years

Can get loan

• Sukanya Samriddhi No
• PPF Yes