Sukanya Samriddhi Yojana Vs PPF
Sukanya Samriddhi Yojana
The Sukanya Samriddhi Yojana was notified on December 2, 2014. The Reserve Bank of India circulated the notification to various banks in India on March 11, 2015. The Sukanya Samriddhi Yojana (launched as part of the Beti Bachao Beti Padhao campaign of the prime minister of India) is aimed at promoting the welfare of the girl child by addressing the issue of gender imbalance in the country. In other words, Sukanya Samriddhi Yojana is aimed at removing the rampant bias against the girl child in India.
Comparisons galore
The most striking aspect of Sukanya Samriddhi Yojana is the interest rate on offer which sparks off instant comparisons with other small savings schemes. At 9.2% p.a (effective from April 2015), compounded yearly, the interest rate offered by Sukanya Samriddhi Yojana is higher than what is offered by other small saving schemes including the Public Provident Fund or PPF.
There are many similarities between Sukanya Samriddhi Yojana and Public Provident Fund as listed below:
Particulars | Sukanya Samriddhi Yojana | Public Provident Fund |
Tax Benefit | Amount deposited, interest earned on it and the maturity amount are exempt from income tax under Section 80C of the IT Act, 1961 | Deposit amount, the interest income and maturity proceeds are all tax exempt under Section 80C of the IT Act, 1961 |
Transfer | Account holders can choose to transfer their accounts across India | A PPF account can be transferred anywhere across the country provided proof of the new residence is submitted by an account holder |
PPF Vs Sukanya Samriddhi Yojana
The following table shows the significant differences between Sukanya Samriddhi Yojana and PPF
Particulars | Sukanya Samriddhi Yojana (SSA) | Public Provident Fund (PPF) |
Eligibility | Open to girl children only who are 10 years old or even younger | Open to all Indian citizens (men and women) of all ages |
Minimum Investment | Rs.1000 p.a (in multiples of Rs.100) | Rs.500 p.a (in multiples of Rs.100) |
Maximum Investment | Rs.1.5 lakh | Rs.1.5 lakh |
Tenure | 14 years | 15 years |
Interest Rate* | 9.2%. The interest rate on SSA accounts is 0.7% higher than the 10-year Government Bond Yield | 8.7% |
Premature withdrawal | Upon attainment of 18 years, the girl child can withdraw up to 50% of the amount deposited in the account for marriage or higher education | Premature withdrawal is available only after 7 years of opening the account. Account holders can withdraw 50% of the amount deposited (corpus) once a year |
Loan Facility | Not permitted under this scheme | Loan facility is available after one year of opening the PPF account (up to 5 years) |
Extension | No extension option is available under this scheme. In case the girl child does not withdraw the money, the account will continue to accrue interest at the prevailing rates | An account holder can seek extension for 5 years. Also, there is no limit on the number of extensions under this scheme |
Termination | 21 years or wedding of the girl child, whichever is earlier | 15 years |
*Interest Rates are subject to change
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