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PPF vs SSY In Telugu - Which Is Better? | Public Provident Fund | Sukanya Samriddhi Yojana | Kowshik
Sukanya Samriddhi Account VS Public Provident Fund
Public Provident Fund (PPF) is a tax-free saving scheme regularised by the Government of India in which the interest on the account is specified for each quarter and is paid by the Government. On the other hand, Sukanya Samriddhi Yojana is a small savings scheme by the Government which is centred around the objective of women and girl child welfare in India.
An SSY account can only be opened in the name of the girl child whereas anyone and everyone can start a PPF. Both schemes have certain pros and cons. PPF is considered more liquid as compared to SSY. But the latter could possibly give higher returns.
On the basis of Eligibility
Sukanya Samriddhi Account can be opened by the guardian, in the name of the girl child. The maximum age limit to open the account is 10 years. An individual who is a resident of India, not an NRI, can open a PPF account. The age of entry in PPF is 18 years.
On the basis of Interest Rate
The interest rates for both the saving schemes keep changing in the financial year as they are linked to the Government security or G-Sec yields. The ROI is fixed and reviewed by the Government in every quarter. The current SSY Account rate of interest for Q2 (July-September) of FY 2022-23 is 7.6%. This interest is compounded annually. While calculating the interest on a monthly basis, the minimum balance in SSY account between the 10th and the end of the month into consideration. This implies that the investments must be made before 10th of every month.
And, the PPF rate of interest for Q2 FY 2022-23 (July-September) is 7.1%. For calculation of interest, the lowest balance between the 5th to the last day of each month is taken into consideration. So, investments should be made before the 5th of every month.
On the basis of tax benefits
If you invest in PPF, your investments qualify in the Exempt-Exempt-Exempt category. This implies that the investments made in this fund qualify for exemption under Section 80(C) of the Income Tax Act,1961. And, the interest accrued at the time of maturity is exempt from taxes. If you make a contribution of Rs.1.5 lakh per year (which is also the maximum limit of contribution) and you are in the 30% tax category, you will be able to save taxes amounting to Rs.45,000.
Likewise, Sukanya Samriddhi Account also falls under the Exempt-Exempt-Exempt category. The annual contributions are exempt from deductions under Section 80C of the Act. The interest accrued and final amount on maturity are exempt from taxes. Similar to PPF, SSY also allows a maximum contribution of Rs.1.5 lakh per financial year.
On the basis of the deposit limit
For PPF, the minimum deposit limit is Rs.500 and the maximum is Rs.1,50,000. For Sukanya Samriddhi Account, the minimum deposit limit is Rs.250 whereas the maximum limit is Rs.1,50,000.
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