Sukanya Samriddhi Scheme Vs Public Provident Fund:
Who can open the account?
Public Provident Fund (PPF) – Any Indian Citizen can open Provident Fund account.
Sukanya Samriddhi Account (SSA) – Sukanya Samriddhi a/c can be opened on a girl child’s name by her natural (biological) parents or legal guardian.
Is there any Age limit to open PPF / SSA?
PPF – There is no age limit.
SSA – SSA can be opened in the name of a girl child from the birth of the girl child till she attains the age of 10 years. As per the government’s notification, account can be opened on girl child’s name who has already attained 10 years within 1 year from now.
Where can I open the account?
PPF – You can open PF account in post offices, nationalized banks (like SBI, PNB etc). You can even open PF account in Private banks like ICICI bank. You can operate the account online.
SSA – As of now you can open it in authorized commercial bank branches and Post offices. Online facility is not available.
What are the required documents?
PPF – Account opening form (Form A), Nomination form, Passport size photo, Pan card copy, ID proof & address proof (as per Bank/post office KYC norms).
SSA – Account opening application form, girl child’s birth certificate, Depositor’s (Guardian/parent) address & ID proofs.
What is the minimum Initial Deposit ?
PPF – The minimum deposit is Rs 500.
SSA – You need to deposit Rs 1000 as initial account opening deposit.
Can I open multiple accounts?
PPF – Only one PPF account is allowed.
SSA – A depositor may open and operate only one account in the name of same girl child under this scheme. There is one exception to this rule. The natural or legal guardian can open two or three accounts if twin girls are born as second birth or triplets are born in the first birth itself.
How many times can I deposit the monies in a Financial Year?
PPF – 12 deposits in one FY.
SSA – The minimum initial contribution in any financial year is Rs 1000. Thereafter the contributions can be in multiples of one hundred rupees. You can deposit 1,490 times.
What is the maximum total deposit allowed in a Financial Year?
PPF – You are not allowed to deposit more than Rs 1.5 Lakh in a FY.
SSA – Same as in PPF.
What is the applicable current rate of interest?
PPF – For the fiscal year 2014-2015, rate of interest is 8.7%.
SSA – For the fiscal year 2014-2015, rate of interest is 9.1%.
Is the rate of interest fixed (as in bank fixed deposits)?
PPF – Rate of interest will be notified each fiscal year by the Government.
SSA – Same as above. So the rate of interest will keep floating every year under both the schemes.
For how many years the contributions (deposits/SIPs) are allowed?
PPF – The minimum tenure is 15 years. Thereafter you can extend the PPF account tenure in block of 5 years.
SSA – You can deposit till 14 years from the date of opening the account.
What is the maturity tenure?
PPF – after 15 years (provided the account is renewed or extended).
SSA – The account will mature after 21 years from the date of account opening (or) on marriage, whichever is earlier.
Is Partial withdrawal allowed?
PPF – partial withdrawal is allowed from 6th year onwards.
SSA – 50% of the accumulated fund can be withdrawn when girl attains 18 years of age.
Can I extend the tenure?
PPF – You can extend PPF account tenure in blog of Five years (after initial 15 year lock-in period).
SSA – No such option is available.
Is there any penalty if no-contributions are made?
PPF – Rs 50 is charged as penalty.
SSA – If minimum (Rs 1000 pa) amount is not deposited, the account will be treated as an irregular account. This can be regularized on payment of Rs 50 per year as penalty.
What is the income tax benefit on contributions?
PPF – Yearly contributions of upto Rs 1.5 Lakh can be shown as tax deduction under Section 80c.
SSA – Same as above.
What is the income tax benefit on ‘Interest amount earned?’
PPF – Interest amount earned on PPF account is exempted from income tax.
SSA – As of now there is no clarity on this aspect. Let’s wait till the Budget session (till this month-February end).
What is the income tax benefit on ‘Maturity amount?’
PPF – It is treated as tax free money.
SSA – Looks like the maturity amount will be treated as ‘tax free’ and exempted from income tax.
Can NRIs open PPF & Sukanya Scheme accounts?
PPF – An NRI (Non Resident Indian) can not open PPF account. However, If you had opened a PPF account when you were a resident of India and subsequently became an NRI, you may continue to deposit the monies in PPF a/c, till it matures (15 years).
SSA – Sukanya Samriddhi scheme is also governed by Post Office Savings Account Rules, 1981. As per RBI guidelines, a Non-Resident Indian (NRI) may not be eligible to invest in Small Savings schemes.