In this era of rising inflation, raising money for children’s higher education and marriage is a big task. The solution is to invest a part of the savings from the young age of the child, so that when the child grows up, this amount can be used for his higher education and marriage. When it comes to long term investment options for girl child, parents get confused between PPF and Sukanya Samriddhi Yojana (SSY). Today we will tell you about these two investment options in detail, which will help you to choose the better option for your girl child.
Public Provident Fund (PPF)
It comes with EEE status. That is, in this option the investment amount, interest earned and the amount received at the time of maturity are all tax free. The tenure of PPF account is 15 years. The scheme currently offers an interest rate of 7.1 per cent per annum, which is higher as compared to other fixed investment products of the same tenor. A minimum investment of Rs 500 has to be made in PPF in a financial year. At the same time, a maximum of Rs 1.5 lakh can be invested in PPF in a financial year.
Sukanya Samridhi Yojana (SSY)
Sukanya Samriddhi Yojana is a very popular investment option for girl child. At present, 7.6 percent interest rate is being given in this scheme. According to the website of India Post, in this scheme, the account has to be opened by the guardian of the girl child before the age of 10 years. When the girl child turns 18, she becomes the account holder. A minimum of Rs 250 and a maximum of Rs 1.5 lakh can be invested in this scheme in a financial year. The interest earned in Sukanya Samriddhi Yojana and the amount received at the time of maturity is tax free.
Will get more interest in SSY
If we look at the interest rate, then SSY is getting a higher interest rate. Let us tell here that the interest rates on all small savings schemes are decided by the government every quarter. Therefore, the interest rates of these schemes may change over time. However, history shows that the interest rate in SSY has always been higher than that of PPF. In this way, if we compare both the schemes on the basis of interest rate, then SSY proves to be better.
PPF account can be availed for a long time
Investors should keep in mind that the account of Sukanya Samriddhi Yojana is compulsorily closed after 21 years of account opening. Whereas it is not so in the case of Public Provident Fund. The PPF account can be extended in blocks of 5-5 years even after the maturity period of 15 years. This means that the investor can take advantage of the SSY account only for a limited period, while the benefit of the PPF account can be availed for the whole life. So if you want to continue investing for your daughter even after 21 years, then PPF will prove to be better for you.
