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    Home » SSY Vs PPF: A Simple Comparison of Two Long-Term Investment Schemes
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    SSY Vs PPF: A Simple Comparison of Two Long-Term Investment Schemes

    Naresh SainiBy Naresh SainiSeptember 29, 2024No Comments3 Mins Read
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    SSY Vs PPF: A Simple Comparison of Two Long-Term Investment Schemes
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    When it comes to securing a child’s future, two government-backed schemes stand out—Sukanya Samriddhi Yojana (SSY) and Public Provident Fund (PPF). Both are popular for long-term savings and offer tax-free returns, but which one is better if you invest Rs. 1.50 lakh annually for 15 years? Let’s break it down in a simple comparison to help you make an informed decision.

    Sukanya Samriddhi Yojana (SSY) and Public Provident Fund (PPF): An Overview

    Sukanya Samriddhi Yojana (SSY) is a scheme specifically designed for the girl child. The account matures after 21 years, but you only need to invest for 15 years.

    Public Provident Fund (PPF) is a more general scheme available to all, with a 15-year lock-in period. Both schemes are backed by the government, ensuring safety and stable returns.

    Here’s how these two schemes work and what returns you can expect.

    Key Features of SSY and PPF

    FeatureSukanya Samriddhi Yojana (SSY)Public Provident Fund (PPF)
    Investment Period15 years15 years
    Maturity Period21 years15 years
    Maximum Annual DepositRs. 1.50 lakhRs. 1.50 lakh
    Tax BenefitsEEE (Tax-free at all stages)EEE (Tax-free at all stages)
    Interest Rate (2023)8.2%7.1%
    Risk LevelVery LowVery Low

    Both SSY and PPF fall under the EEE category, meaning you get tax exemptions on investment, returns, and maturity amount under Section 80C of the Income Tax Act.

    Return Comparison: SSY vs PPF for 15 Years

    If you invest Rs. 1.50 lakh annually for 15 years, here’s what you can expect from both schemes:

    See also  Secure Your Future with Atal Pension Yojana: Invest Rs 210 and Get Rs 60,000 Yearly Pension
    SchemeTotal Investment (15 years)Interest Rate (2023)Maturity ValueInterest Benefit
    Sukanya Samriddhi YojanaRs. 22,50,0008.2%Rs. 69,80,100Rs. 47,30,100
    Public Provident FundRs. 22,50,0007.1%Rs. 40,68,209Rs. 18,18,209

    Investment Highlights

    • SSY Returns: You invest Rs. 22.50 lakh over 15 years in the Sukanya Samriddhi Yojana, and by the time the account matures after 21 years, the maturity amount will be Rs. 69.80 lakh. This includes an interest benefit of Rs. 47.30 lakh.
    • PPF Returns: If you invest the same Rs. 22.50 lakh in a Public Provident Fund, you will get a maturity amount of Rs. 40.68 lakh after 15 years. The interest earned here is Rs. 18.18 lakh.

    Which Scheme Offers Higher Returns?

    It’s clear from the calculation that the Sukanya Samriddhi Yojana (SSY) provides a higher return due to the longer maturity period (21 years) and the higher interest rate (8.2%). The Public Provident Fund (PPF), while offering stable returns, generates less profit compared to SSY due to its shorter maturity period and lower interest rate (7.1%).

    While both are great options for long-term financial planning, the choice depends on your specific goals and needs. For a girl child’s future, SSY offers better growth potential. For general savings and tax benefits, PPF is a solid option.

    With both plans, you can secure a tax-free, risk-free investment future for your child or yourself

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    Naresh Saini
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    Naresh Saini, a graduate with over 10 years of experience in the insurance and investment sectors, specializes in covering topics related to insurance, investments, and government schemes. His expertise and passion for the financial industry allow him to provide valuable insights, helping readers make informed decisions. Naresh is committed to delivering clear and engaging content in these fields.

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