The Public Provident Fund (PPF) and Sukanya Samriddhi Yojana (SSY) are both government schemes with several similarities. Both promote long-term, disciplined investment and can be opened at any post office across the country.

These schemes allow you to invest small amounts regularly, helping you build a large corpus over time. Both require a 15-year investment period. Now, the question is: if you need to invest for 15 years, which scheme should you choose? You can make an informed decision by comparing the calculations for both.

Safety and Guaranteed Returns

Both the Public Provident Fund (PPF) and Sukanya Samriddhi Yojana (SSY) are small savings schemes offered by the post office, ensuring safety and security. Since they are government-backed, there is no concern about their safety. Both schemes offer fixed-income returns, determined by the Central Government. The government reviews the interest rates for Small Savings Schemes every 3 months. Currently, PPF offers an annual interest rate of 7.1%, while SSY offers 8.2% annually.

Both Schemes Are Tax-Free

Both Sukanya Samriddhi Yojana and PPF are tax-free, offering Triple E (EEE) tax benefits. This means:

  1. Tax exemption on investments up to Rs 1.50 lakh under Section 80C of the Income Tax Act.
  2. No tax on the interest earned.
  3. The entire amount received on maturity is also tax-free.

Similar Features of PPF and SSY

  • Both schemes encourage long-term investment, helping achieve significant financial goals with small, regular savings.
  • You can invest a maximum of Rs 1.50 lakh annually in both schemes, with the option to make monthly deposits.
  • PPF requires deposits for 15 years, with maturity also at 15 years. Similarly, SSY also requires 15 years of investment, but the account matures at 21 years.

SSY Offers a Longer Maturity Benefit

While both schemes allow a maximum investment of Rs 22.50 lakh over 15 years, the maturity benefits differ:

  • PPF: After 15 years, you will receive approximately Rs 40.68 lakh, including Rs 18.18 lakh as interest.
  • SSY: While the maximum deposit is the same, the account matures after 21 years, six years later than PPF. Due to compounding, the maturity amount in SSY will be Rs 69.80 lakh, including Rs 47.30 lakh as interest.

Important Note on SSY

The Sukanya Samriddhi Yojana account can only be opened for girls under 10 years of age.

Disclaimer: The information provided about the Post Office Monthly Income Scheme (POMIS) is for general informational purposes only. Times Bull is not responsible for any financial investments made; it is entirely your responsibility. Please consult a financial advisor for better results.