Comparison of Sukanya Samriddhi Account vs Public Provident Fund. Lots of people have the confusion regarding what is Difference and Similarities of the SSA and PPF. So in this article we try to clear about this.
What is Sukanya Samriddhi Yojana?
When it comes to talking about the small investment schemes, the SSY or the Sukanya Samriddhi Yojana is the icing on the cake. The scheme has been launched as per the orders of the PM. On the 22nd day of January, 2015, the official announcement of the plan was made. With the assistance of this project, parents will be able to secure the monetary condition of their female children in the years to come.
What is Public Provident Fund?
Most of the salaried persons opt for the Public Provident Fund or the PPF. The scheme has been in operation for a long time. The PPF plan is one of the long term investment schemes that the central government oversees. The scheme assists the people in securing their future. The plan also offers lucrative interest rates.
Advantages of Sukanya Samriddhi Yojana over Public Provident Fund
Apart from the similarities and dissimilarities that you will see in the form of a table, there are two distinct advantages of the SS accounts over the PPF accounts. The first is that the SS account can be opened for little girls who have just been born. It is not possible in the case of PPF accounts.
The second advantage happens to be in the respect of the final amount that you will be getting at the end of the entire term. As per the opinion of the financial experts, the investing in the SSY will provide the depositor with a better return when compared to the PPF scheme.
Who can open SSA and PPF account?
As far as opening the SS account is concerned, it has to be done by any of the biological parentes or the person who has been selected to be the legal caretaker of the female child. The entire process will have to be monitored by the parents as the female child is a minor.
On the other hand, any legal citizen of the country will have the option of opening a PPF account. The person opening the account will have to monitor the activities of the accounts.
Age limit to open PPF and SSA
As per the guidelines of the PPF accounts, the government has not put any age related restrictions. But there is a restriction related to the opening of the account under the SSY. The SS account can only be opened in the name of a child who has not yet attained the age of 10 years. The account can be opened as soon as the female child is born but any female child over the age of 10 will not be able to get the benefits of the program.
Where can I open PPF and SSA?
As of now, anyone who is interested in availing the benefits of the long term investment scheme like PPF will have to open the account in any of the branches of the post offices. The same account can be opened in any of the nationalized as well as the private sector banks. The operation of the account can be monitored online.
The account that will assist the parents of the female child, in securing her economic base, under the Sukanya Samriddhi Yojana can be operated from the post offices nearby. The same can be done from any of the branches of the banks, selected by government. You will not be able to monitor the activities if the SS account online.
What are the required documents in both?
Opening a PPF account is rather simple. One needs to provide the details asked for in Form A. Along with this form, the account holder will need to provide the authority with a nomination application. The other documents that are required for the opening of PPF account are ID papers, documents supporting the address claims, recently clicked passport sized snaps and one PAN’s photocopy.
For opening the SS account, the parents or the people in charge of the little girl will have to fill and submit the form that will assist in the opening of the account. They will also have to provide the authority with the certificate of birth for supporting the claim of the age of the female child. The person who is opening the account will have to provide the ID and residential address proofing documents.
What is the minimum Initial Deposit in both?
If the candidate is interested in opening the PPF account, then he/she must know that the lowers amount that needs to be deposited in the PPF account is Rs. 500.
If the parent is interested in opening an account under the SSY, then they need to know that the lowest amount that will have to be deposited in the account is Rs. 1000. Depositing this amount is mandatory while opening the account.
Can I open multiple accounts?
As per the guidelines of the PPF scheme, each person will be entitled to hold a single account.
As per the guidelines of the SSY, the parent will get the chance of opening one account for one child. The highest number of accounts that one person will be entitles to open is three, i.e if they have one single girl and then have twin girls.
How many times can I deposit the money in a Financial Year?
The person holding the PPF account will be given the chance of depositing money in the account 12 times, one every month.
A person holding the SS account will be able to given the chance of depositing money in the account as many as 1,490 times.
What is the maximum total deposit allowed in a Financial Year?
Both in the PPF account and the SS account, the person will be able to accumulate a total of 1.5 lakhs during any financial year.
What is the applicable current rate of interest?
So many people opt for the two types of schemes as they offer a handsome interest rate. For the PPF account, a person will get the interest rate of 8.4% (April- June 2017). For the SS account, the rate of interest was 9.1% during its launch. Now the rate has been reduced to 7.9% during April – June 2017.
Is the rate of interest fixed?
Similar to the bank deposits, the interest rate in both the cases of PPF and SSY are not fixed. The government has the right to increase or reduce the rate as per the activities in the financial market.
For how many years the contributions (deposits/SIPs) are allowed?
All the candidates who have opted for opening the PPF account will have to deposit the money for a term of at least 15 years. Once the tenure is complete, they may wish to continue deposition for another 5 extra years.
All the candidates who have opened the SS account will be able to access the amount accumulated in the account after the term of 21 years is finished or when the girl attains the legal age and gets married.
Differences & Similarities of Sukanya Samriddhi Account vs Public Provident Fund (SSY vs PPF)
Both the schemes have been designed to assist the common people in investing. While there are some similarities between the two, there is much dissimilarity as well. In this section, you will get a quick look at the both the aspects.
Similarities of Sukanya Samriddhi Account vs Public Provident Fund
|S. No.||Similar Features between the two||SS Scheme and PPF Scheme|
|1.||Investment type||Both the two schemes have been designed to help the common people in saving money on a long term basis|
|2.||Interest rate – Floating or Fixed||As per the guidelines, both the schemes will be subjected to change with respect to the interest rates. It may change on an yearly basis|
|3.||Decision making authority||Both the schemes are designed and will be operated by the Central government. So, they will be deciding the changing interest rates|
|4.||Income tax advantages||According to the guidelines, all the money that one saves under the two schemes will be deemed tax free under section 80C|
|5.||Possibility of premature withdrawal||The feature of being able to withdraw the money before the final tenure is provided under both the schemes|
|6.||Opening more than one account||None of the schemes will allow the candidates to hold multiple accounts. SSS states each female child will have one account. The same is true for people opting for PPF accounts|
|7.||Scope of penalty||To encourage people in making regular deposits, the government has decided to levy a penalty of Rs. 50 in case of irregular or delayed deposits|
|8.||Interest type||Compound Interest|
|9.||Earning the interest||On an yearly basis|
Differences Sukanya Samriddhi Account vs Public Provident Fund
|Sl. No.||Types||SSY Account||PPF Account|
|1.||Objective||Secure the monetary future of the female children||Acquiring a secure investment and tax free income|
|2.||Eligibility for opening the account||Female child||Any legal citizen of the nation|
|3.||Minimum Age Limit||From birth||No limit of age|
|4.||Maximum Age Limit||Till the attainment of 10 years||No limit of age|
|5.||Interest rate||7.9% (2017)||8.4% (2017)|
|6.||Minimum investment||1000 rupees||500 rupees|
|7.||Maximum investment||1,50,000 rupees||1,50,000 rupees|
|8.||Maximum number of deposits||No such limit||12 times|
|9.||Tenure||14 years||15 years|
|10.||Maturity||21 years||15 years|
|11.||Places where one can open the accounts||28 banks that have been selected by the central government and the Post Office||SBI and other such banks, Private or other nationalized banks that have been permitted, Post Offic|
|12.||Documents required||Form for opening the account, Birth certificate of the girl, Identity proof and address proof of guardian or parents||Account registration form , ID proof, Address proof, 2 passport photographs|
|Demand Draft, cheque, cash||Online payment procedure, cash, cheque, DD|
|14.||Premature withdrawal norms||Once the female child attains the age of 18, 50% of the total accumulated money can be withdrawn||The untimely withdrawal can be made when the holder dies|
|15.||Is deposition allowed after maturity tenure||Only if the account is not closed, the holder will continue to receive interests||The account holder will be able to continue depositions for a term of 5 more years|
|16.||Launch date||2nd December, 2014||1st July, 1968|
|17.||Facility of Loan||Not provided||Loan can be taken only after the completion if 3rd year|
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