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PPF vs NSC vs SSY — Which is the better investment scheme?

PPF vs NSC vs SSY — Which is the better investment scheme?

PPF vs NSC vs SSY — Which is the better investment scheme?
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By StoryTailors Jun 9, 2022 6:33:40 PM IST (Published)

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Public Provident Fund, National Savings Certificate and Sukanya Samriddhi Yojana are risk-free government-backed investment schemes with distinct benefits.

Investment decisions require proper analysis of available investment options. Before investing, you should consider certain factors such as financial goals, returns, tenure, interest rates, risks and so on. The government of India offers numerous saving schemes such as Public Provident Fund, National Savings Certificate and Sukanya Samriddhi Yojana. Each of these schemes caters to different financial requirements of the investors.

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Here are the complete details of the scheme to help you choose the best for you.


Public Provident Fund (PPF)

Public Provident Fund (PPF) scheme is a long-term investment option. It offers an attractive rate of interest of 7.1 percent per annum. The interest earned and the returns are not taxable under the Income Tax Act and the amount deposited during a year can be claimed as a deduction under Section 80C of the I-T Act. You can start a PPF account with a minimum investment amount or Rs 500 and the maximum investment amount is Rs 1.5 lakh per annum.

The tenure of the scheme is 15 years, and it offers guaranteed, risk-free returns.

National Savings Certificate (NSC)

The National Savings Certificate (NSC) is another government initiative that provides good returns. It offers a 6.8 percent return per annum and is one of the most popular small savings instruments.  Contributions made towards NSC can get you a deduction of up to Rs 1.5 lakh under Section 80C of the Income Tax Act. The scheme is available at post offices and can create a regular stream of monthly income post-retirement. The minimum investment required is Rs 1,000 per annum.

All Indian citizens, except people under NSC VIII Issue, HUFs and Trusts are eligible to invest in the scheme.

Sukanya Samriddhi Yojana (SSY)

The Sukanya Samriddhi Yojana is a government-backed scheme that offers a means of savings for the girl child. It offers a return of 7.6 percent per annum and comes with a tenure of 21 years from the date of opening of the account or till the marriage of the girl after she attains the age of 18 years. An account can be opened with a minimum investment of Rs 250 and the maximum limit is Rs 1.5 lakh per year. Contributions made towards SSY are eligible for a deduction under Section 80C of the Income Tax Act.

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