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    PPF Vs SSY

    • 5 min read
    • Last Modified Date: February 8, 2023
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    PPF Vs SSY: What is the difference between the two? Sukanya Samriddhi Yojana Account (SSY) and Public Provident Fund (PPF) are the safest investments. These are accessible to those desiring significant financial development with a low-risk component.

    So, if you wish to invest in any or both of these schemes, you would investigate and check. Financial objectives, risk tolerance, rate of interest, and versatility should all get addressed.

    Read SSY – Sukanya Samriddhi Yojana Benefits & Interest Rates.

    PPF Vs SSY

    PPF and SSY are solid investment options, although they differ in important ways. The Sukanya Samriddhi Yojana is a female child welfare plan. It helps to safeguard a girl child’s future. But, the PPF is a program that enables depositors to receive zero-tax interest.

    In India, the Public Provident Fund (PPF) plan provides a long-term investing choice. It provides high profits while also giving tax deductions to the investor. A PPF account may get created in any private or public bank in India. It may get created in post offices as well as banks. PPF returns are completely tax-free per Section 80C of the IT Act.

    Moreover, depositors can avoid tax by putting a least of Rs.500 and a max of Rs.1,50,000 in a single fiscal year.  They can also get other benefits such as loans, withdrawals, and renewal of accounts.

    Read PPF Interest Rates for FY 2022-23 (October-December).

    SSY is a social plan for girls that got launched as a component of the ‘Beti Bachao, Beti Padhao’ initiative. Banks or postal systems in India can create an SSY account. Investment in the SSY enables financial stability for a female child aged 10 or less. Under the SSY, a girl’s account can get created in any commercial or government sector bank for 21 years.

    An SSY account can only get created in the name of a girl child. But PPF accounts can get created by anybody. But, these savings plans have advantages and disadvantages. The table below compares PPF to SSY based on the following parameters:

    Parameters

    PPF

    SSY

    Rate of Interest 

    7.10 percent

    7.60 percent

    Eligible Age

    15 

    Since birth

    Min. Deposit Investment

    Rs. 500/-

    Rs. 250/-

    Max. Deposit Investment

    Rs. 1,50,000/-

    Rs. 1,50,000/-

    Tax Breaks

    Rs. 1,50,000/-

    Rs. 1,50,000/-

    Duration (In years)

    15

    21

    Early Withdrawal

    Post 5 Financial Years

    Post 18 years of age

    Is Facility of Nomination available?

    Yes.

    No.

    Is a Facility for a loan available?

    Yes.

    No.

    Detailed Comparison of SSY and PPF

    The table above summarizes the differences depending on several characteristics. This section compares the duration, how it works, qualifications, and required paperwork. It also talks about the rate of interest, tax advantages, and interest rates.

    PPF Vs SSY: Who is eligible to create these accounts?

    SSY Accounts can get created by a girl child’s biological parents or legal guardian. The girl kid must be an Indian resident at least 10 years of age to create an SSY account. PPF accounts may get created by anybody. Also, even minor children can also create a minor PPF account.  An Indian resident can open PPF accounts. But an NRI cannot open a PPF account  The general admission age for PPF is 18 years of age.

    PPF Vs SSY: Min. Limit of Deposit and Max. Limit of Deposit

    PPF and SSY schemes may get started with little money. For PPF, the minimum limit of the deposit is Rs.500/- and the maximum limit of the deposit is Rs.1,50,000/-. SSY Account requires a minimum limit of deposit of Rs.250/- and a maximum limit deposit of Rs.1,50,000/-.

    PPF Vs SSY: Interest Rates

    The interest rates for these vary with time. They also change during the fiscal year as determined by the government. The return gets determined and periodically evaluated by the government. For 2022, an SSY Account currently offers an interest rate of 7.6%. This interest gets increased yearly. When calculating the interest rate monthly, the least amount of balance in SSY between the 10th and the final day of the month gets considered. This implies that contributions must get done by the tenth of each month.

    The PPF interest rate for the third quarter of 2021 (October-December) is set at 7.1 percent. To compute interest, the least balance from the 5th to the final day of every month gets used. As a result, contributions must get done by the 5th of each month.

    PPF Vs SSY: Tax Advantages

    PPF investments get excluded per Section 80(C) of the IT Act of 1961. As a result, the interest earned at the maturity date is tax-free. Let us take an example. Your annual PPF contribution is Rs.1.5 lakh and you are in the 30 percent tax bracket. Then, you would be eligible to save Rs.45,000.

    SSY Accounts are also included in this category. They also get entitled to exclusions per Section 80C of the IT Act. The accruing interest and the ultimate amount at maturation are likewise tax-free. SSY has an investing cap of Rs.1.5 lakh every fiscal year.

    PPF Vs SSY: Withdrawal

    PPF allows for partial or whole withdrawals after 6 fiscal years from the account start date. But, one must consult with the particular bank for the procedures of part withdrawal. Prominent private banks, like Axis and ICICI, permit part withdrawals post 5 years. While banks like HDFC and SBI permit part withdrawals post 7 years like SBI and HDFC.

    But, one can only withdraw from the Sukanya Samriddhi Account if the girl child reaches 18. This withdrawn amount can get utilized for further education.

    PPF Vs SSY: Maturity/Duration of Account

    A PPF account is valid for 15 years from the conclusion of the fiscal year in which it got issued. The depositor may withdraw the amount upon maturity. He may also prolong the scheme’s duration, and make further payments. An SSY Account matures when the girl kid attains 21. After 18, part withdrawal from an SSY account gets permitted. But only for further educational reasons.

    PPF Vs SSY: Is Nomination Service Available?

    PPF Depositors can nominate an individual. But, SSY depositors cannot.

    PPF Vs SSY: Is Loan Service Available?

    Loan services are available under the PPF scheme. So, one can avail of a loan. But, not through the SSY.

    PPF Vs SSY: Procedures for Opening These Accounts?

    • Procedure for Opening PPF Accounts?

    Below are the procedures for opening a PPF account.

    1. Fill up Form A or the PPF account opening application form. It is accessible at your local Postal Office or online.
    2. Submit Form A along with the necessary KYC information.
    3. Pay the first deposit amount for opening the PPF account. It might range from Rs. 500 to Rs. 1,50,000.
    4. After the procedure gets completed, you will receive a passbook.
    5. Your PPF account is now operational.
    • Procedure for Opening SSY Accounts?

    SSY Accounts can get opened in two ways: Offline and online.

    • Offline

    An SSY account can get opened offline in two ways: at a bank or at a postal office.

    • Go to the nearest post office or bank.
    • Fill out the SSY application form with the girl child’s details.
    • Bring the girl child’s birth certificate and aadhaar card. Also, bring and submit her pan card, and any other essential documents with you.
    • Following verification, your account will get created.  The passbook will get sent to the female child’s parents or guardians.
    1. Online

    For opening an SSY account online, rather than visiting a bank office, all you need to do is

    • Examine the official site of the bank with which you want to open an account.
    • Fill out the form with all the needed information about the girl child. Also, submit all details about the parents or legal guardians.
    • Upload scanned copies of any certifications and residence proofs.
    • When you hit “ submit ”, your SSY account will get activated.

    PPF Vs SSY: Required Documents for Opening These Accounts?

    Documents Required to Establish a PPF Account

    • Form A for starting a PPF account
    • Form for Nomination
    • Photograph in passport size
    • KYC requires a Pan card, an Aadhaar card, ID evidence, and proof of domicile.

    Documents Required to Establish an SSY Account

    • Application form for opening SSY account
    • Girl child’s birth certificate
    • Proof of residence
    • Identification Proof of parents or guardian of the girl child
    • Extra documents required by the Postal Office or your bank

    Conclusion

    PPF and SSY are both incredible saving schemes. But each has its own advantages and disadvantages. Selecting between the two is a trade-off between more flexibility and higher returns. PPF gives greater flexibility, whereas SSY delivers larger yields. In any event, the appetite for risk is irrelevant. So, if you have extra money lying around, you can invest in PPF and SSY.

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    PPF Vs SSY FAQs

    No. An SSY account may only get opened by a girl kid who is 10 years old or younger. But, a  girl child cannot open a PPF account. Because PPF accounts can only get opened by a resident of India who is above 18 years old.

    To start an account with SSY, the minimum deposit is Rs 250. In the case of PPF, the minimum is Rs 500 only. But, the highest limit for deposits for SSY and PPF is Rs 1.5 lakh.

    PPF and SSY are both incredible saving schemes. But each has its own advantages and disadvantages. Selecting between the two is a trade-off between more flexibility and higher returns. PPF gives greater flexibility, whereas SSY delivers larger yields. In any event, the appetite for risk is irrelevant. So, if you have extra money lying around, you can invest in both PPF and SSY.

     No. A girl child can have only one SSY account.

    After 21 years in your SSY account, one can withdraw the amount plus interest. So when an account matures, one will receive the cumulative amount and interest. There will be no tax payable on the withdrawals.

    If you wish to earn interest from the money you invested in the SSY account in that month, you must deposit it before the 10th of the month.

    The interest generated throughout the PPF duration is tax-free under Section 80C of the IT Act of 1961. A PPF investment deposit of up to 1.5 lakhs is tax-free. Also, the amount received at maturity is tax-free.

    SSY is a female child welfare plan that helps to safeguard a girl child’s future. But, the PPF is a program that enables depositors to receive zero-tax interest.

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