Everybody wants to secure their future. There are many people who invest somewhere. There are various investment options available, but certain government schemes have gained popularity among the general public. Notable examples include the Public Provident Fund (PPF) and the Sukanya Samriddhi Yojana. Both of these small savings schemes offer interest paid by the government. Let’s explore which scheme offers a higher interest rate.
PPF
The PPF scheme, managed by the central government, is well-liked by working individuals. Investors can contribute a minimum of Rs 500 and a maximum of Rs 1.5 lakh each year. The account matures after 15 years, with the option to extend it for an additional 5 years. Additionally, investors can make partial withdrawals and take out loans against their accounts.
Currently, the interest rate stands at 7.1 percent. The government recently announced that this rate will remain unchanged for the fourth quarter starting January 1, 2024. PPF accounts can be opened at any post office, government bank, or select private banks. Importantly, the interest earned on this account is tax-free.
Sukanya Samriddhi Yojana
Designed specifically for daughters, the Sukanya Samriddhi Yojana allows for an initial investment of just Rs 250. The maximum annual investment is also capped at Rs 1.5 lakh. A parent or legal guardian can open this account for a girl child under the age of 10. Contributions to this scheme are eligible for tax deductions under Section 80C of the Income Tax Act. The interest rate for deposits in the Sukanya Samriddhi Yojana is set at 8.2 percent.
The government reviews and announces interest rates for small savings schemes offered by post offices and banks every quarter. The latest adjustments were made for the fourth quarter of the financial year 2023-24.
