SSY vs PPF: Interest price, different particulars that you must know
3 min readSSY vs PPF: Both Sukanya Samriddhi Yojana (SSY) and Public Provident Fund (PPF) are one of many excessive yielding Government of India (GoI)-backed funding devices. But, Sukanya Samriddhi account might be opened for a lady youngster solely whereas PPF might be opened by any incomes particular person. According to tax and funding consultants, each choices have a lock in interval however PPF rate of interest is 7.1 per cent whereas SSY rate of interest is 7.6 per cent — 0.5 per cent increased than PPF account’s present annual yield. However, they suggested traders to stay vigilant about different funding guidelines whereas investing for the woman youngster as mere rate of interest is just not sufficient for investing resolution.
Speaking on SSY vs PPF SEBI registered tax and funding skilled Jitendra Solanki mentioned, “It depends on the timing of the investment. If an investor starts investing immediately after the birth of its girl child, then SSY is better suited as the investor will be able to invest in the Sukanya Samriddhi account till its child becomes 14 year old. However, if the investor is late in beginning the investment, then the principal accumulation will go down in SSY account as one can’t invest beyond 14 years of its girl child. In that case, PPF is better suited as it allows an investor to invest till its maturity of 15 years.”
Solanki mentioned that SSY account requires strict and disciplined funding whereas PPF offers extra flexibility to the investor. In SSY, untimely withdrawal could be very tough whereas in PPF, one can withdraw whole PPF steadiness after 5 years of PPF account opening paying some penalty. So, those that need flexibility in a single’s funding, PPF is healthier choice than SSY, mentioned Solanki citing, “SSY is an asset investment while PPF is a liquid investment and an investor needs to keep this basic difference between these two risk-free investment options in mind.”
Highlighting the distinction between PPF and Sukanya Samriddhi account Kartik Jhaveri, Director — Wealth Management at Transcend Consultants mentioned, “In PPF, an investor is allowed to invest till it wants, while in the case of SSY, this option is absconding. In PPF, you can extend your investment period even after the maturity period while in SSY, you have no option but to withdraw the maturity amount even though you don’t need a lump sum amount at the time of Sukanya Samriddhi account maturity.”
Jhaveri went on so as to add that in SSY, an investor’s cash is locked for 18 years. In truth, after 18 years, an investor is allowed to withdraw 50 per cent of the SSY account steadiness whereas relaxation 50 per cent might be withdrawn when the investor’s daughter change into 21 years previous.
Both Kartik Jhaveri and Jitendra Solanki suggested traders to have a diversified portfolio with some fund allocation to the SSY account and a few fund allocation to PPF, in order that one can get luxurious of each asset and liquid funding.
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