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Sukanya Samriddhi Scheme vs PPF: Which can create larger corpus on maturity with Rs 1.2 lakh annual investment for 15 years?
- Written by ZeeBiz WebTeam
Published: Zee Business| Updated: Zee Business
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?
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A government-backed savings scheme.
Offers fixed interest rates, guaranteed returns, and tax benefits.
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PPF Key Features
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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
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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)?
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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
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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
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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
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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
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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
9/9PPF: Offers tax-free interest and exemptions under Section 80C. SSY: Provides tax-free deposits, interest and maturity under Section 10 and Section 80C.
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