Public Provident Fund (PPF) has been the most common long term investment option for various sections of people since ages.This is because of fixed returns and the tax benefit attached to it.
To have a deeper insight you can refer : PPF Account,PPF Interest rate,PPF Rules – The Ultimate guide !
The government however launches various new schemes to attract the Individuals and promote savings in the long run.Hence, Sukanya Samriddhi Yojana was launched in the Dec 2014 to encourage savings and ensure financial security for the girl child in India.
Since the launch of Sukanya Samriddhi scheme potential investors are in a state of confusion as to which long term option is better PPF Account or Sukanya Samriddhi Account.
For detailed analysis you can refer : Sukanya Samriddhi Yojana – All you need to know !
Public Provident Fund(PPF) vs Sukanya Samriddhi Yojana(SSY) :
The similarities as well as the differences between the two have been listed below:
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As per experts ,PPF is a more flexible option whereas Sukanya Samriddhi Account is better for those who can afford long lockin period.Presently,Sukanya Samriddhi Yojana is fetching more interest than PPF so looked upon as a good alternative for long term investors who want high returns and no risk.The tax benefits are same on both PPF and SSY.Both,PPF and SSY provide tax free returns and are also eligible for a Tax deduction U/s 80 upto a maximum of Rs.1.5 lakhs.
Here,you need to be clear that,the total Tax deduction Under Section 80 C can be 1.5 lakhs only.So,if you invest in both PPF and Sukanya Samriddhi Scheme,you won’t get any additional tax benefit.The combined deduction for deposit made in both PPF and SSY accounts cannot exceed Rs.1.5 lakhs during a financial year.
However,based on your financial objectives,you can diversify your portfolio by investing partially in both of these and enjoy good returns and tax benefits also.
Also go through our popular blog post : PPF or ELSS – Which is better Investment ?
For other Long term Investment options refer : 7 Best Long term Investment Options in India !