Introduction
When it comes to long-term savings, both the Public Provident Fund (PPF) and Sukanya Samriddhi Yojana (SSY) are excellent options. These government-backed schemes offer secure returns and tax benefits, making them ideal for wealth accumulation in India. This guide will help you understand the PPF benefits in India, the Sukanya Samriddhi Yojana interest rates, and how to invest in these schemes effectively.
What is Public Provident Fund (PPF)?
PPF is a government-backed savings scheme designed for individuals who seek safe and long-term investment growth. It comes with attractive interest rates and tax exemptions.
PPF Benefits
- Guaranteed Returns: Backed by the Government of India, ensuring security.
- Tax Benefits: Investments qualify for tax deductions under Section 80C of the Income Tax Act.
- Loan & Withdrawal Options: Partial withdrawals and loans are available after a specific tenure.
- Long-Term Growth: 15-year tenure with an option to extend in 5-year blocks.
What is Sukanya Samriddhi Yojana (SSY)?
SSY is a small savings scheme launched by the Government of India to promote savings for the girl child. It offers higher interest rates than PPF and additional benefits.
Sukanya Samriddhi Yojana Interest Rates & Benefits
- Higher Interest Rate: SSY generally provides higher returns than PPF.
- Tax-Free Maturity Amount: Contributions, interest, and maturity benefits are tax-exempt.
- Encourages Savings for Girl Child: Can be opened for a girl child below 10 years.
- Lock-in Period: Until the child turns 21 years old with partial withdrawal allowed for education.
PPF vs. Sukanya Samriddhi Yojana Comparison
Feature | Public Provident Fund (PPF) | Sukanya Samriddhi Yojana (SSY) |
Interest Rate | Moderate | Higher |
Tax Benefits | Section 80C | Section 80C (EEE Exemptions) |
Tenure | 15 years (extendable) | Until girl turns 21 |
Withdrawal | After 7 years | After 18 years (50% for education) |
Who Can Invest? | Any Indian citizen | Parents/guardians for a girl child |
How to Invest in PPF and SSY?
Investing in PPF
- Open a PPF account in any bank or post office.
- Deposit a minimum of ₹500 and a maximum of ₹1.5 lakh annually.
- Enjoy tax-free interest accumulation and flexible investment terms.
Investing in SSY
- Open an SSY account at a post office or designated bank.
- Deposit between ₹250 to ₹1.5 lakh per year.
- Continue contributions until the girl reaches 15 years.
- Maturity benefits are available after she turns 21 years.
Best Long-Term Savings Plans India
Apart from PPF and SSY, consider these alternatives for long-term savings:
- National Pension System (NPS): Ideal for retirement planning.
- Fixed Deposits (FDs): Secure investments with flexible tenures.
- Mutual Funds: Equity and debt funds for higher returns.
- Employee Provident Fund (EPF): A mandatory retirement savings scheme for salaried employees. Also Read – Emerging Sectors in India for Long-Term Investment by 2025
Conclusion
Both PPF and Sukanya Samriddhi Yojana are among the best long-term savings plans India has to offer. If you aim to secure your future or save for your daughter’s education, these options provide safe and reliable returns. Choose based on your financial goals and investment horizon.