Sukanya Samriddhi Account vs Public Provident Fund

An informed and analytical investment decision aids in offering higher investment benefits in the long run. Before investing in any tool, you must consider certain basics such as the goal of the investment, the returns and rate of interests offered, risks involved etc. And basis of your requirement, you must consider an option.

Investing in your child's future:A wise decision & a loving choice

Benefits of Investing In Child Plan

Waiver of Premium Benefit

Future Premiums are paid by the insurer upon death of policyholder

Flexible Payout Options

Your premiums help your child achieve their dreams through lump sum or regular payouts

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You get tax benefits under Section 80(C) and no tax on returns under Section 10 (10D)

Investment Flexibility

It offers the flexibility to invest at regular intervals or as a one-time contribution

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Nothing Is More Important Than Securing Your Child's Future

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Disclaimer: #The investment risk in the portfolio is borne by the policyholder. Life insurance is available in this product. The maturity amount of Rs 1 Cr. is for a 30 year old healthy individual investing Rs 10,000/- per month for 30 years, with assumed rates of returns @ 8% p.a. that is not guaranteed and is not the upper or lower limits as the value of your policy depends on a number of factors including future investment performance. In Unit Linked Insurance Plans, the investment risk in the investment portfolio is borne by the policyholder and the returns are not guaranteed. Maturity Value: ₹1,05,02,174 @ CAGR 8%; ₹50,45,591 @ CAGR 4%. *Tax benefits and savings are subject to changes in tax laws. All plans listed here are of insurance companies’ funds.

There are a host of private institutions offering good investment avenues. However, public sector is also not left behind in introducing best investment options with higher returns. And when it comes to offering the safest investment avenues, two options that has been gaining popularity eventually are Sukanya Samridhi Yojana (SSY) and Public Provident Fund (PPF).

SSY v/s PPF

Both the schemes are introduced by the Government of India for long-term investment goals. As they are owned by the government, the returns are fully secured and eligible for earning tax benefits as well. Having said that it is prudent to know a bit of these investments before parking your money into them.

Sukanya Samriddhi Yojana: When it comes to securing a safe future of a girl child, there is no better option than Sukanya Samriddhi Yojana. Launched in the year 2015 under the campaign “Beti Bachao Beti Padhao”, the scheme encourages to save a considerable portion for the girl’s future. One can also save on tax up to Rs 1.5 lakh under Section 80C of the Income Tax Act. The applicable rate of interest for the year 2020 is 8.4%, on a compounded basis. The minimum deposits start from Rs 250 and can go up to the maximum of Rs 1.5 lakh in a year.
Public Provident Fund: PPFs aim at mobilize small savings and offer higher returns along with tax benefits. A minimum investment of Rs 500 is necessary to open an account where one can invest up to a maximum of Rs 1.5 lakh in a year. The account matures in a duration of 15 years, where the returns are offered at a rate of interest 7.9%.

SSY v/s PPF Account: Key Highlights

Not to mention, there are some alluring features that make them highly preferred investment options over the others. Some of the key highlights of these investment tools are:

Parameters	Sukanya Samridhi Yojana	Public Provident Fund
Investment Type	Long-term	Long-term
Who can open	A parent of a girl child	An Indian citizen can apply. Minor accounts are also available
Minimum Deposit	Rs 250	Rs 500
Maximum Deposit	Rs 1.5 lakh	Rs 1.5 lakh
Maturity Period	21 years	15 years
Age Eligibility	Till the girls turns 10 years	No upper age limit
Rate of Interest	8.4%	7.9%

People also read: Sukanya Samriddhi Yojana Calculator

Sukanya Samridhi Yojana (SSY) Vs Public Provident Fund (PPF)

Despite being the govt.-owned investment schemes, these accounts differ from each other in many ways:

While Sukanya Samridhi Yojana Account is opened by the parents in the name of the girl child, PPF account can be opened by anyone who is a citizen of India.
The rate of interest for both keeps changing as they are linked to government security and it is reviewed by every quarter. The current ROI in SSY is 8.4%, where the calculation is done basis on the balance in the account in 10^th and the end of the day in the month. So, in case of SSY, investments should be done before 10^th, every month.

On the other hand, the offered ROI in PPF for current year is 7.9%, where the calculation is done based on the lowest balance available in the account in 5^th to the last day of the month.

In case of deposits as well, the schemes differ from each other. SSY requires minimum deposit of Rs 250 to open an account. While in PPF, it is Rs 500. However, the maximum limit for both schemes is same i.e. Rs 1.5 lakh.
On the basis of the maturity, both these schemes remain different. The maturity period for SSY is 21 years, while it is 15 years of PPF account.
Sukanya Samridhi Yojana Account allows partial withdrawals once the girl child attains the age of 18 years up to 50% of the total balance in the account. In case of PPF, one can withdraw up to 50% of the account balance after 5 years from the date of account opening.
PPF account comes with nominee option, which is not applicable in case of Sukanya Samridhi Yojana.
A maximum of two accounts can be opened in case of SSY, one account for each girl child. But under PPF account, a person can open only one account.
In terms of premature closure, both the schemes differ from each other. SSY allows premature withdrawals in unavoidable conditions such as untimely demise of the account holder, if someone is unable to continue on the logical grounds etc. On the other hand, PPF account can be withdrawn before it matures after 5 years under the grounds such as treatment of deadly diseases, higher education etc.

Child Plan vs Sukanya Samriddhi Yojana vs Public Provident Fund

Unique Triple Benefit

Future premiums paid by insurer on parent's death

Monthly income to fund child's education on parent's death

Lumpsum payout to family on parent's death

Returns

Return as of Apr 2024
12%-15%
8.2%
7.1%

Availability

Availability
Girl Child or Boy Child
Girl child only
Girl Child or Boy Child

Max Entry Age
Upto 18 years
Upto 10 years
No Age Limit

Flexibility

Invested Amount can be Withdrawn after
5 years
21 years
15 years

Conditions for Premature closure
Anytime after 5years
Extreme Compassionate Grounds
Serious Ailments or for education

Penalty on Premature Closure
No Penalty after 5 years
Returns reduced to Post Office Savings rate
1% reduction in interest rate

Max deposit amount in an year
No Limit
1.5 Lacs
1.5 Lacs

Documentation

Documentation Required for Withdrawal
Low
High
Low

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FAQ's

Sukanya Samriddhi Account and Public Provident Fund-which one is better?

Well, it is a tough question to answer as each comes with their own set of features and benefits that fit the different individuals. However, SSY is good for those who are the parents of a girl child and want a secured future for her. Moreover, in terms of current ROI as well, SSY offers 0.5% higher returns than PPF. Again it is completely your call now. PPF offers suitable flexibility and SSY offers higher returns, you should decide as per your requirement and investment goals as we mentioned in the starting of this article. Analyse your needs first then go for the one that perfectly suits your budget and goals.

†Policybazaar does not endorse, rate or recommend any particular insurer or insurance product offered by any insurer. This list of plans listed here comprise of insurance products offered by all the insurance partners of Policybazaar. The sorting is based on past 10 years’ fund performance (Fund Data Source: Value Research). For a complete list of insurers in India refer to the Insurance Regulatory and Development Authority of India website, www.irdai.gov.in
*All savings are provided by the insurer as per the IRDAI approved insurance plan.
^The tax benefits under Section 80C allow a deduction of up to ₹1.5 lakhs from the taxable income per year and 10(10D) tax benefits are for investments made up to ₹2.5 Lakhs/ year for policies bought after 1 Feb 2021. Tax benefits and savings are subject to changes in tax laws.
#The investment risk in the portfolio is borne by the policyholder. Life insurance is available in this product. The maturity amount of Rs 1 Cr. is for a 30 year old healthy individual investing Rs 10,000/- per month for 30 years, with assumed rates of returns @ 8% p.a. that is not guaranteed and is not the upper or lower limits as the value of your policy depends on a number of factors including future investment performance. In Unit Linked Insurance Plans, the investment risk in the investment portfolio is borne by the policyholder and the returns are not guaranteed. Maturity Value: ₹1,05,02,174 @ CARG 8%; ₹50,45,591 @ CAGR 4%
+Returns Since Inception of LIC Growth Fund
¶Long-term capital gains (LTCG) tax (12.5%) is exempted on annual premiums up to 2.5 lacs.
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^^The information relating to mutual funds presented in this article is for educational purpose only and is not meant for sale. Investment is subject to market risks and the risk is borne by the investor. Please consult your financial advisor before planning your investments.