Sukanya Samriddhi Scheme vs PPF: Which can create larger corpus on maturity with Rs 1.2 lakh annual investment for 15 years?
Compare Public Provident Fund (PPF) and Sukanya Samriddhi Yojana (SSY) based on a Rs 1.2 lakh annual investment over 15 years.
ZeeBiz WebTeam | Dec 27, 2024, 06:39 PM IST
The Public Provident Fund (PPF) and Sukanya Samriddhi Yojana (SSY) are government-backed savings schemes offering guaranteed returns and tax benefits. While PPF is a general savings scheme with a 15-year tenure, SSY is tailored for the financial future of a girl child, ensuring long-term savings for her education or marriage. Both schemes offer tax-free returns. This analysis compares their maturity values with an annual investment of Rs 1.2 lakh over 15 years.
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What is PPF?
- A government-backed savings scheme.
- Offers fixed interest rates, guaranteed returns, and tax benefits.
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PPF Key Features
- Interest Rate: 7.1% per annum, compounded annually.
- Investment Limits: Minimum Rs 500; Maximum Rs 1.5 lakh annually.
- Tenure: 15 years, extendable in blocks of 5 years.
- Tax Benefits: Tax-free returns under Section 80C of the Income Tax Act.
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PPF Returns: Rs 1.2 lakh annual investment for 15 years
- Total Investment: Rs 18,00,000 over 15 years.
- Total Interest Earned: Rs 14,54,567.
- Maturity Value: Rs 32,54,567.
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What is Sukanya Samriddhi Yojana (SSY)?
- A savings scheme designed for securing the financial future of a girl child.
- Provides guaranteed returns and tax-free benefits.
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Key Features of SSY
- Minimum Deposit: Rs 250 annually.
- Maximum Deposit: Rs 1.5 lakh annually.
- Eligibility: For a girl child under 10 years of age.
- Tenure: Maturity at 21 years or upon the girl’s marriage after 18 years.
- Tax Benefits: Tax-free under Section 10 and Section 80C of the Income Tax Act.
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Advantages of SSY
- Risk-Free Returns: Backed by the government.
- Purpose-Driven Savings: Specifically for education or marriage.
- Full Tax Benefits: On deposits and maturity value.
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SSY Returns: Rs 1.2 lakh annual investment for 15 years
- Total Investment: Rs 18,00,000 over 15 years.
- Total Interest Earned: Rs 37,42,062.
- Maturity Value: Rs 55,42,062.
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Investment Analysis
- PPF Maturity Value: Rs 32,54,567.
- SSY Maturity Value: Rs 55,42,062.
- Difference: SSY yields Rs 22,87,495 more than PPF.
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Tax Benefits Comparison
PPF: Offers tax-free interest and exemptions under Section 80C.
SSY: Provides tax-free deposits, interest and maturity under Section 10 and Section 80C.