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Tuesday, March 17, 2015

Sukanya Samriddhi Account Vs PPF

Sukanya Samriddhi Account and Public Provident Fund (PPF) can be useful instruments for saving for the future needs of the children.
  
 

In terms for taxation, deduction up to Rs. 1.5 lakh is allowed under Section 80C in both the Sukanya Samriddhi Account and PPF.

The Sukanya Samriddhi Account can only be opened in the name of the girl child while PPF scheme can be availed by all

A Sukanya Samriddhi Account can be opened with an amount of Rs. 1,000 while it is Rs. 100 for a PPF account. 

A Sukanya Samriddhi Account can be opened by the guardian in the name of a girl child till she attains the age of ten years. Only one account is allowed per girl child. Parents can open this account for a maximum of two children.
An investor can open PPF accounts in the name of minors but a maximum of Rs. 1.5 lakh can be deposited every year including all the accounts.

In an Sukanya Samriddhi Account, a minimum of Rs. 1,000 has to be deposited every year and the maximum limit is Rs. 1.5 lakh. And there is no limit on number of deposits either in a month or in a financial year.
In case of PPF, an individual but has to deposit a minimum of Rs. 500 in a financial year while the maximum limit is Rs. 1,50,000. And deposits can be made in lump-sum or in 12 installments.

The Sukanya Samriddhi Account can be closed after the girl child in whose name the account was opened completes the age of 21. If account is not closed after maturity, the balance will continue to earn interest as specified for the scheme from time to time.
The maturity period of a PPF account is 15 years but it can be extended in blocks of five years.

 Partial withdrawal is permissible every year from the seventh financial year of opening the PPF account. In case of Sukanya Samriddhi Account, up to 50 per cent of the accumulated amount can be withdrawn after the account holder turns 18 while full withdrawal is possible after she turns 21.

The interest rate on Sukanya Samriddhi Account and PPF is not fixed. The government will every year declare the interest rate of the scheme. For 2014-15, the government would be paying 9.1 per cent interest on Sukanya Samriddhi Account against 8.7 per cent on PPF.

 

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