New Delhi: People are now increasingly looking to invest their hard-earned money instead of just keeping it in the bank. Investments must always be done carefully and one should thoroughly research and analyse all the available options. Financial objectives, risk appetite, interest rates, flexibility, and other factors must be considered.
People in India have several options, especially since the central government has launched multiple savings schemes. Among them, the Public Provident Fund (PPF) and the Sukanya Samriddhi Yojana (SSY) are considered some of the safest investment options. In this article, we will take a look at which is better for your girl child.
What is PPF?
The PPF or the Public Provident Fund is a very popular investment scheme and it is backed by the government. It gives guaranteed returns on investment as it is a government scheme and it has an attractive rate of interest. The maturity period of a PPF account is 15 years and it is popular among those looking to build a retirement corpus by investing for a long time. It is a great option for those people who are looking to invest for a considerable time in a risk-free manner and get steady returns.
What are the benefits of PPF?
The PPF has a good rate of interest of 7.1 per cent compound yearly.
There are tax exemptions for deposits in a PPF account up to Rs 1.5 lakh a year under the Income Tax Act’s Section 80C.
An Indian citizen who lives in the country and is 18 years or older can open a PPF account.
The PPF is best for those looking to invest for a considerable period of time in a risk-free manner and they will also get tax exemptions.
The minimum amount one can invest in the PPF is Rs 500 and the maximum amount one can invest in a year is Rs 1.5 lakh.
What is Sukanya Samriddhi Yojana?
The Sukanya Samriddhi Yojana or SSY was launched as a part of the government’s ‘Beti Bachao, Beti Padhao’ campaign. It is a welfare scheme which has been designed for girl children in the country. Investing in Sukanya Samriddhi Yojana allows parents or legal guardians to ensure financial security for a girl child who is aged 10 years or less. As per the SSY, one can open an account in the name of the girl in any private and public sector bank for a tenure of 21 years.
What are the benefits of Sukanya Samriddhi Yojana?
The scheme’s main objective is to secure the future of a girl child and the parent or legal guardian can open an account on behalf of the minor girl child. One can open an account under the girl child’s name until she attains the age of 10 years.
The scheme’s tenure is 21 years or until the girl gets married after turning 18.
The minimum amount which can be deposited in a year is Rs 250 and the maximum amount that can be deposited in the years is Rs 1.5 lakh.
One can get tax benefits of up to Rs.1.5 lakh for contributions made towards the scheme under Section 80C of the Income Tax Act.
The current rate of interest in the SSY for Q3 (October-December) of FY 2024-25 is 8.2 per cent and the interest is compounded annually.
In the end, if the focus is on the education and marriage of the girl child, then Sukanya Samriddhi Yojana is a great option as it is specifically tailored for the purpose. On the other hand, if someone is looking for flexible, tax-saving and long-term savings options, then PPF is a great choice as it gives guaranteed returns. But PPF reportedly gives greater flexibility when it comes to tenure extensions and loans against the balance.
The Public Provident Fund (PPF) and the Sukanya Samriddhi Yojana (SSY) are considered some of the safest investment options. In this article, we will take a look at which is better for your girl child. Personal Finance Business News – Personal Finance News, Share Market News, BSE/NSE News, Stock Exchange News Today
