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Wednesday, January 20, 2016

Sukanya Samriddhi Vs PPF


ukanya Samriddhi Yojana under the Beti Bachao Beti Padhao mission is gaining lot of interest and parents are rushing to open account for this savings scheme for their girl child. Although there are many long term savings scheme in India, public provident fund is one of them and people are distinguishing SSA with PPF since they are very similar. However there are many differences between both these schemes. So let's checkout how Sukanya Samriddhi Account and Public Provident Fund differ:

Sukanya Samriddhi Yojana Vs. Public Provident Fund (Differences & Similarities)

1ObjectiveFinancial security to the girl child, Tax deduction on deposits and assured returnsAssured return and tax benefit
2Who is eligible to open the accountGirl childAny resident Indian
3Minimum entry age limitRight from the birth of the girl childNo age limit
4Maximum entry age limitOnly for girls aged 10 years or less from the date of birth.No age limit
5Interest rate (2014-2015)9.1%8.70%
6Minimum investment (yearly)Rs.1000Rs.500
7Maximum investment (yearly)Rs.1,50,000Rs.1,50,000
8How many times deposits are allowed in a financial year:No limit (monthly or 
12 deposits
9Tenure (from the date of opening of account)Minimum 14 yearsMinimum 15 years
10Maturity (from the date of opening of account)21 years15 years
11Where can accounts be opened:Post offices and banks, 28 authorized banksPost offices, SBI & it's associates, private and nationalized banks who are 
permitted to collect direct taxes
12Mandatory documents for account opening:Account opening form, birth certificate of the girl child. Residential and ID proof of the natural 
Account opening form, 2 passport sized photographs, Address and ID proof
13Payment ModeCash/Cheque/Demand DraftCash/Cheque/Demand Draft & Online 
payment can be done at SBI and ICICI bank
14Conditions for premature withdrawal50% allowed. To be used for girl's education or marriage. Condition is that girl should be 18 years at that timeAllowed only when account holder dies
15Can we continue investing after maturityYes (If account is not closed, interest will be received on the balance)Yes (Extendable in a block of 5 years)
16Launch date02December201401July1968
17Loan FacilityNot AvailableAvailable, from 3rd year till 6th year
18Nomination facilityNoYes
 Although SSA and PPF are different, there are many similar features in Sukanya samriddhi scheme and public provident fund as follows:
1Type of investmentBoth are long term savings instrument with zero risk as 
they offer guaranted tax free returns
2Interest rate - Fixed or FloatingBoth carry floating interest
3Who decides interest rateCentral government decides interest rate every financial year before 1st April
4Income tax benefitBoth SSA and PPF are tax exempt under section 80C. i.e. 
investments and returns are non-taxable
5Is premature withdrawal possible?Yes. Please check the conditions above
7Can you open multiple accounts for one personIt's not possible under any of this scheme
8If contribution is not made what is the penaltyRs.50
9Type of Interest EarnedCompound interest
10Interest earned monthly/yearlyYearly
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