PPF or Sukanya Samriddhi Account Scheme? Which is a greater possibility?
2 min readQuestion: As per my data, after the preliminary tenure of 15 years a PPF account could be prolonged for five years at a time however no more than three time. So if I open a PPF account within the title of my daughter at the moment who’s 5, her account will mature mandatorily when she turns 35 of her age. So I really feel that when she begins incomes, PPF is not going to be an possibility for her at the moment. Which is a greater possibility PPF or Sukanya Samriddhi Account Scheme (SSAS) as each provide long run saving technique? Rahul
Answer: As per the PPF Scheme 2019, there aren’t any restrictions as to the variety of instances a PPF account could be prolonged for a block of 5 years at a time so long as the account holder is a resident of India after its preliminary tenure of 15 years. So your details about variety of instances a PPF account could be prolonged is inaccurate. Moreover, there isn’t any restriction on one opening one other PPF account after current one has matured and has been closed.
Sukanya Samriddhi Account Scheme (SSAS) is a greater possibility because it presents a better rate of interest of seven.6% in opposition to 7.1% supplied by PPF account. However, there may be different facet to the coin. Since you want to accumulate this cash for an extended time i.e. past 35 years of age of your daughter, PPF is a greater possibility as a result of it may be prolonged for any variety of block of 5 years however account underneath SSAS needs to be compulsorily closed after 21 years of opening.
Since there’s a restrict of Rs. 1.50 lakh upto which you’ll deposit cash in a PPF account yearly, you’ll face downside in deploying the maturity proceeds of SSAS in every other tax free funding avenue. So do your calculations and resolve the place you wish to put the cash based mostly on whether or not you’ll use the cash in SSAS for schooling and marriage of your daughter or not otherwise you simply wish to accumulate long run corpus for her.
Please word, you’ll be able to open account underneath each the schemes and put cash main cash in SSAS so long as it’s providing larger charge of curiosity after bearing in mind the cash which you’ll want for her schooling and marriage.
Balwant Jain is a tax and funding professional and could be reached at jainbalwant@gmail.com
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