Wednesday, April 1, 2015

Sukanya Samriddhi Yojna Vrs PPF

Government of India announced a new scheme called Sukanya Samriddhi Yojna (SSY) in Jan 2015, which is targeted towards benefitting the young girl child. The rate of interest offered in the scheme is 9.2% which is 50 basis point more than the popular PPF ( Public Provident Fund) Scheme. I thought of comparing SSY and PPF for the eligible population as it will be difficult to choice between the two instruments for most of the people.


Category
PPF
SSY
Eligibility
All Indian Residents
Only Girl Child Below 10 Year
Minimum Yearly Deposit
500
1000
Maximum Yearly Deposit
Rs 1,50,000
Rs 1,50,000
Duration
15 years, can be extended
21 years Max (For Deposits)
Current Rate of Interest
8.7% (Floating)
9.2% (Floating)
Duration
15 years, can be extended
21 years Max
Liquidity
 
 
Complete Withdrawal
After 15 year
After attaining age of 21
Partial Withdrawal
50% of deposit after 6 years
50% once girl attains age of 18
Income Tax Benefit Investment
Eligible for 80 C Benefit
Eligible for 80 C Benefit
Income Tax Benefit Withdrawal
Interest / Principal Exempt from Tax
Interest / Principal Exempt from Tax
Accounts allowed per family
One account per person
Only first 2 girl child, 3rd is allowed in case of twins birth
Loan Facility
Loan available on PPF Deposit
No Clarity on it
 
 
 

Overall, the scheme is very good debt investment for the people who ha ve a girl child less than 10 year old. They can open a account in most of the Public Sector Banks or Post Office. The deposits can be transferred to the any location within India in case it is required. The scheme has the edge of higher interest rate with almost all the other benefits which PPF enjoys.

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