The most popular savings schemes among the small savings schemes run by the Government of India through India Post are Sukanya Samriddhi Yojana (SSA) and the Public Provident Fund (PPF). Both the schemes promote disciplined investment by giving good returns, and apart from similarities like investment and investment period, there are some similarities between these two schemes. Apart from this, the information we want to give today is that by investing the same amount in the same period in the Sukanya Samriddhi Yojana account opened for a daughter below 10 years of age, you can earn more than two and a half times the return.
Investment in PPF and SSA will be equal
Through these two schemes, which can be started in any post office or bank in the country, you can get a big fund by making a fixed investment regularly, and for this, waiting till retirement is unnecessary. Investment in both PPF and SSA has to be made for 15 years, and the maximum annual limit of investment is also the same, i.e. ₹ 1,50,000. So, if you invest regularly for a maximum of 15 years, then the total investment in both schemes can be ₹ 22,50,000.
The Government of India guarantees the security of investment in PPF and SSA.
There can be no tension about the security of investment in PPF and SSA, which are included in the small savings schemes guaranteed by the Government of India, and in both these schemes of fixed income scheme, interest is paid as per the interest rate fixed by the Central Government every quarter. At present, 7.1 percent interest is being paid annually on the PPF account and 8.2 percent interest is being paid annually on the SSA account.
PPF and SSA are schemes of the EEE category
Investment in both PPF and SSA schemes saves income tax every year, the interest deposited in the account every year is not taxable, and finally, no tax is payable on the amount received on maturity – that is, both the schemes are schemes of EEE category.
The difference between PPF and SSA
Both small savings schemes encourage long-term investment and create a good fund for future needs. A maximum of ₹1,50,000 can be invested in PPF and SSA every year and both have to be invested for 15 years continuously. However, investment in both schemes can be made every month as well but in that case, the interest earned reduces a bit. The only difference is that after investing for 15 years in PPF, maturity also happens in 15 years only but after investing for 15 years in SSA, one has to wait for six years because maturity happens in 21 years.
The benefit of compounding if maturity is delayed
But in these six years, your fund grows very fast, because not only do you get compounding interest income for six years, but the interest in SSA is also higher than PPF. Now you see – by investing continuously for 15 years in a PPF account, you deposited ₹22,50,000, on which you will get a total of ₹18,18,209 as interest at the time of maturity, while in SSA also, by investing continuously for 15 years, only ₹22,50,000 will be deposited, but due to maturity at 21 years and the interest rate being 8.2 percent, you will get a total of ₹49,32,119 as interest at the time of maturity, which is more than two and a half times the interest of PPF.