PPF vs SSY – Both the interest received in PPF and the amount received on maturity are tax free. SSY is tax free scheme. On this EEE i.e. tax exemption is available at 3 different levels.
Best Small Savings Scheme: If we talk about small savings, then Public Provident Fund (PPF) and Sukanya Samriddhi Yojana (SSY) are included in the highest interest paying schemes. The method of investing in both is almost the same. If the maturity of PPF is 15 years, then one has to invest in SSY only for 15 years. In both the schemes, a maximum of Rs 1,50,000 can be deposited in a year and in both, like RD, the maximum limit can be invested on a monthly basis. In such a situation, the question will definitely come in your mind that where and how much benefit of interest will be there.
ssy calculator
- Current interest rate: 7.6 per cent per annum
- Monthly or annual investment: Rs 10,000 or Rs 150,000
- Investment in 15 years: Rs 22.50 lakh
- Total amount on maturity: Rs 63,65,155
- Interest Benefit: Rs 41,15,155
- Returns: 185%
15 years to invest, but maturity 21 years
The maturity of SSY scheme is 21 years. That is, if you open an account for a 1-year-old daughter, it will mature in 22 years. The most important thing about the scheme is that you have to invest in it for the initial 15 years. In the rest of the year, the interest fixed under the scheme continues to be received on your deposit.
PPF: Return Calculator
- Maximum monthly deposit: Rs 12,500
- Maximum annual deposit: Rs 1,50,000
- Interest Rate: 7.1% compounding annually
- Amount on maturity after 15 years: Rs 40,68,209
- Total Investment: 22,50,000
- Interest Benefit: Rs 18,18,209
If PPF scheme is extended for 5 years
- Maximum monthly deposit: Rs 12,500
- Maximum annual deposit: Rs 1,50,000
- Interest Rate: 7.1% compounding annually
- Amount on maturity after 20 years: Rs 66.58 lakh
- Total Investment: 30 Lakh
- Interest benefit: Rs 36.58 lakh
Where More Advantage
It is clear that on investing a maximum of 22.50 lakhs equal to the Public Provident Fund in Sukanya Samriddhi Yojana, there is an additional benefit of 23 lakhs interest. But the amount deposited in Public Provident Fund is available after 15 years. Whereas in Sukanya Samriddhi Yojana one has to wait for 21 years. However, the cost incurred by you remains the same.
Even if the Public Provident Fund is extended for the next 5 years, the maturity amount will be equal to Sukanya Samriddhi Yojana after spending 7.50 lakh extra.
Tax Benefit
Income tax benefit is also available under section 80C in PPF account. In this, you can take advantage of tax exemption on investment up to 1.5 lakhs annually. The interest received in this scheme and the amount received on maturity are tax free.
Sukanya Samriddhi Yojana is a tax free scheme. On this EEE ie tax exemption is available at three different levels. First of all, exemption on annual investment up to 1.50 lakhs under section 80C of Income Tax Act. Secondly, there is no tax on the returns received from it. And thirdly, the amount received on maturity is also tax free.
PPF vs SSY