Sukanya Samriddhi scheme vs EPF: Which can produce higher corpus on Rs 1,50,000 annual investment?
Compare Sukanya Samriddhi Yojana (SSY) and Employee Provident Fund (EPF) to determine which scheme provides a higher corpus on an annual investment of Rs 1.5 lakh.
Sukanya Samriddhi Yojana (SSY) and Employee Provident Fund (EPF) are popular government-backed savings schemes offering attractive returns and tax benefits. SSY is specifically designed to secure the financial future of a girl child, while EPF serves as a retirement savings plan for salaried employees. Both schemes offer distinct features, including interest rates, contribution limits, and tax exemptions. In this comparison, we evaluate the potential corpus of Rs 1.5 lakh annual investment to help you make an informed decision.
Sukanya Samriddhi Yojana (SSY) interest rates
- Current interest rate: 8.2% per annum (effective from January 1, 2024).
- Compounding: Yearly, providing better long-term growth.
Eligibility for Sukanya Samriddhi Yojana
Who Can Open:
Guardians for a girl child below 10 years of age.
Maximum two accounts per family; exceptions for twins/triplets.
Deposit rules for SSY
- Initial Deposit: Rs 250.
- Annual Contribution: Minimum Rs 250, maximum Rs 1.5 lakh (in multiples of Rs 50).
- Deposits can be made for 15 years from account opening.
Deposit rules for SSY
- Interest is calculated monthly and credited yearly.
- Tax-free under Section 80C of the Income Tax Act.
Deposit rules for SSY
Withdrawals allowed after the girl turns 18 years or completes Class 10.
Maturity:
- After 21 years from account opening.
- Marriage allowed as a closure condition post 18 years, subject to rules.
Sukanya Samriddhi Corpus
- Total Investment: Rs 22.5 lakh over 15 years
- Interest Earned: Rs 46.77 lakh
- Maturity Value: Rs 69.27 lakh
What is EPF?
- Managed by the Employees' Provident Fund Organisation (EPFO).
- Interest Rate: 8.25%, reviewed quarterly by the Ministry of Labour.
- Contributions by both employer and employee.
EPF contribution breakdown
- Employee contributes 12% of salary, split as:
- 3.67% to EPF.
- 8.33% to Employees' Pension Scheme (EPS).
- Employer matches the contribution.
EPF tax benefits
- Exempt-Exempt-Exempt (EEE) Status:
- Investment, interest earned, and maturity amount are tax-free.
EPF corpus and comparison with SSY
- Monthly Contribution: Rs 12,500.
- Duration: 20 years.
- Maturity Value: Rs 76.39 lakh.