Sukanya Samriddhi Yojana or Public Provident Fund; Which investment tool is better for your girl child?

Sukanya Samriddhi Yojana vs PPF: When it comes to investing for the girl child, Sukanya Samriddhi Yojana (SSY) is the most talked-about investment tool among Indians. Ever since its launch, Narendra Modi's most ambitious gild child investment scheme has been flooding with investments as the Sukanya Samriddhi Yojana interest is 8.4 per cent for the period of 1st July 2019 to 31 December 2019. So, for those who have a girl child, SSY is emerging as long-term investment goals in regard to a girl child like higher studies, marriage etc. However, if we go by the tax and investment experts' views, Public Provident Fund or PPF is a much better option than Sukanya Samriddhi Yojana. Though, the PPF interest rate is 7.9 per cent, which is 0.5 per cent lower than the Sukanua Samriddhi Yojana. 

Comparing SSY and PPF Kartik Jhaveri, Director — Wealth Management at Transcend Consultants told Zee Business Online, "In SSY, an investor gets a return of around 8.5 per on his or her investment with income tax exemption up to Rs 1.5 lakh investment in the plan. However, if we look at the PPF investment, the return is to the same tune with the same income tax benefits but an investor can invest in it till he or she wants to invest in." Jhaveri said that in PPF an investor has the luxury to withdraw the entire amount after 15 years of investment or he or she can continue it till he or she wants to invest. 

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But, in the case of SSY, your money is choked till your daughter becomes 18 years of age. In fact, even after 18 years of your daughter, you can fish out only 50 per cent of your investment and the rest of the amount can be withdrawn when your daughter attains 21 years of age. In this mode of investment, you can invest until your daughter attains 14 years of age.

Elaborating upon the SSY and PPF investment Jitendra Solanki, a SEBI registered investment expert said, "In PPF, one can get 8 per cent of return while in SSY, you get 8.4 per cent return per annum. So, for the beginner, SSY looks better but they need to remember SSY is an asset investment while PPF is a more liquid investment. After five years of investment, one can withdraw a partial or whole amount he or she has invested." Solanki added that in SSY, the investor becomes a disciplined investor as his amount can't be used for the purpose other than the purpose of investment.

"In case of liquidity, an investor can reinvest his or her investment portfolio in PPF after five years in equity-linked plans and can avail around 10.5 per cent to 11 per cent after giving taxes on their returns while in PPF an investor can expect around 8 per cent average return for the same period while in SSY an investor can expect near 8.5 to 9 per cent on his or her investment for the same period of investment," said Solanki. He advised investors to diversify their portfolio by choosing PPF, SIP, and SSY so that he can maintain the discipline in his or her investment.​