When
it comes to investing your money, there are many options available, including
government schemes. Two popular government schemes in India are Public
Provident Fund (PPF) and other government schemes such as National Savings
Certificate (NSC), Sukanya Samriddhi Yojana (SSY), and Kisan Vikas Patra (KVP).
In this article, we will compare PPF with these government schemes.
1.
Public
Provident Fund (PPF)
PPF is a long-term savings scheme
that is backed by the Government of India. It is a secure investment option and
offers tax benefits to investors. The current interest rate on PPF is 7.1%, and
it is compounded annually. The minimum investment in PPF is Rs.500 per year,
and the maximum investment is Rs. 1.5 lakh per year. The maturity period of PPF
is 15 years, and it can be extended in blocks of 5 years. One can open a PPF
account in any nationalized bank, post office or with some private banks.
2.
National
Savings Certificate (NSC)
NSC is also a long-term savings
scheme backed by the Government of India. It offers a fixed interest rate, which is currently 6.8%, and it is compounded annually. The minimum investment in NSC is Rs. 100, and there is no maximum limit. The maturity period of NSC is 5 years. One can open an NSC account in any nationalized bank or post office.
3. Sukanya Samriddhi Yojana (SSY)
SSY is a government scheme that is designed to promote the education and marriage of girl children in India. The current interest rate on SSY is 7.6%, and it is compounded annually. The minimum investment in SSY is Rs. 250 per year, and the maximum investment is Rs. 1.5 lakh per year. The maturity period of SSY is 21 years, and partial withdrawals are allowed after the child reaches the age of 18. One can open an SSY account in any nationalized bank or post office.
4. Kisan Vikas Patra (KVP)
KVP is a savings scheme that is aimed at farmers and rural investors. The current interest rate on KVP is 6.9%, and it is compounded annually. The minimum investment in KVP is Rs. 1,000, and there is no maximum limit. The maturity period of KVP is 124 months, which is a little over 10 years. One can open a KVP account in any nationalized bank or post office.
Comparison of PPF with Other Government Schemes
1. Interest Rates
The interest rates offered by PPF, NSC, SSY, and KVP are fixed by the Government of India and are subject to change from time to time. Currently, PPF offers the highest interest rate among these schemes, followed by SSY, NSC, and KVP.
2. Investment Limit
PPF has a maximum investment limit of Rs. 1.5 lakh per year, while NSC and KVP do not have any such limit. However, the minimum investment in NSC and KVP is higher than that of PPF. SSY has a lower minimum investment than PPF but has the same maximum investment limit.
3. Maturity Period
PPF has the longest maturity period among these schemes, which is 15 years, and it can be extended in blocks of 5 years. NSC has a maturity period of 5 years, while KVP has a maturity period of a little over 10 years. SSY has the longest maturity period among these schemes, which is 21 years.
4. Tax Benefits
All these schemes offer tax benefits under Section 80C of the Income tax Act.
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