Sukanya Samriddhi Yojana vs PPF: This is better for your girl child - Check experts' view

Sukanya Samriddhi Yojana vs PPF: After the launch of Sukanya Samriddhi Yojana (SSY), parents having a daughter have been pumping their money in this Prime Minister Narendra Modi's ambitious investment scheme, which aims for the 'girl child education under the 'Beti Bachao Beti Padhao' project. However, according to the tax and investment experts, Public Provident Fund or PPF is a much better option than the SSY. It gives almost the same return and tax benefits but the PPF investments can be made for the time period which suits the choice of the investors. Experts say this luxury of the suitable time frame is missing in Sukanya Samriddhi Yojana.

Comparing Sukanya Samriddhi Yojana and PPF Kartik Jhaveri, Director — Wealth Management at Transcend Consultants told Zee Business Online, "In Sukanya Samriddhi Yojana, an investor gets a return of around 8.5 per cent on one's invested money with income tax exemption up to Rs 1.5 lakh investment under Section 80C of the Income Tax Act. 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 PPF till he or she wants to invest in." Jhaveri went on to add that in PPF, an investor has the luxury to withdraw the entire amount after 15 years of investment or one can continue it till he or she wants to invest in five-year blocks by extending one's PPF account by submitting Form-H within one year after the 15 years of maturity.

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But, in the case of Sukanya Samriddhi Yojana, an investor's money is choked till his or her daughter attains 18 years of age. In fact, even after 18 years of one's daughter, the investor can fish out only 50 per cent of one's maturity amount and the rest of the maturity money can be withdrawn when one's daughter becomes 21 years. In this mode of investment, you can invest until your daughter attains 14 years of age.

Highlighting the difference between Sukanya Samriddhi Yojana and Public Provident Fund Jitendra Solanki, a SEBI registered investment expert said, "In PPF, one can get 7.9 per cent of return while in SSY, you get 8.5 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 Sukanya Samriddhi Yojana, the investor becomes a disciplined investor as his money 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.