Before doing any investment in financial instrument, it's necessary to compare returns as well of all aspects of both schemes. In this article we have made comparison between Sukanya Samriddhi Yojana and Public Provident Fund. Let's get started.
Both Sukanya Samriddhi Account (SSA) and Public Provident Fund (PPF) aims to seed the savings habit but both schemes have their own pros and cons.
Below are the some key differences between SSA vs PPF
| Points of Difference | Sukanya Samriddhi Account (SSA) | Public Provident Fund (PPF) |
|---|---|---|
| For whom | Only for Girl Child. | For every Indian Citizen |
| Age Limit | From the birth till she attains age of 10 years. | No age limit. |
| By whom | By the girl child who has attained the age of 10 years or by the natural or legal guardian. | By the Individual but by the natural or legal guardian for the minor child |
| Where to open | Post office and nationalized banks but not private banks. | Post office and nationalized banks, including private banks. |
| Number of Account | One account for each girl child, maximum up to 2 or 3 accounts if twin girls are born in the second birth or triplets are born in the first birth. | Each Individual can hold only one account in his name. |
| Minimum Contribution | Rs.1,000 | Rs.500 |
| Maximum Contribution | Rs.1.5 lakhs in all accounts. | Rs.1.5 lakhs in all accounts. |
| Interest Rate | 8.6% per annum. | 8.10% per annum. |
| Tax Benefit on the Contribution | Contributed Amount will be deductible u/s 80C. | Contributed Amount will be deductible u/s 80C. |
| Tax Benefit on the interest earned | Interest Earned is tax free | Interest Earned is tax free |
| Time Period of contribution | Minimum tenure of contribution is 14 years from the date of opening of account. | Minimum 15 years and then in blocks of 5 years. |
| Maturity | 21 years from the date of opening of account. | 15 years from the fiscal year of opening of account. |
| Penalty | Rs.50 per year if minimum contribution is not made | Rs.50 per year if minimum contribution is not made. |
| Mode of Deposit | Cash or Demand Draft or Cheque | Cash or Demand Draft or Cheque |
| Premature Withdrawal | Allowed up to 50% for the girl’s higher education and marriage after she attains 18 years of age | No premature withdrawal is allowed except in case of death of the account holder. |
| Loan | No loan can be taken on the SSA balance. | Loan can be taken from the third year of opening of account to the sixth year. |
| Taxation on Maturity | No tax will be levied on the maturity amount. | No tax will be levied on the maturity amount. |
Some Notes:
- Interest rate under both the schemes will be notified each year by the Government
- Interest will be compounded yearly under both schemes.
- Loan on the PPF balance is restricted to 25% of the balance at the end of 2nd year.
- At present interest earned on SSA account is taxable in the hands of guardian but it may get tax rebate in the upcoming budget.
- Contributed amount get deduction u/s 80c up to Rs.1.5 lakhs including all other eligible investments.
I hope this comparison is helpful to you. Thank you.