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Comparing PPF, NSC, Sukanya Samridhi & Senior Citizens Saving Scheme

Savings and investments are two most important concepts in the Financial Industry.

Investment basically means that “any money that is spent today in the hope of financial benefits that may be reaped in a future time frame”. In other words investment is an asset that is purchased with the hope that it will generate income in the future.

There are different instruments of investment and every instrument has specific features and one should choose their investment instrument according to their need.

Below is the list of some of the most popular small savings scheme

PPF (Public Provident Fund)

PPF (Public Provident Fund) is a long term savings and tax savings instrument in India, introduced by the government in 1968. PPF scheme is administered by the provisions of Public Provident Fund Act 1968. Deposits made towards the PPF account is eligible for deduction under Income Tax Act and the interest earned on it is exempted from tax.

Features of Public Provident Fund (PPF)

Interest Rates – 7.8%

Tenure – 15 years

Initial Investment / Deposit – Rs. 100

Annual Deposit Amount – Rs. 500 – Rs. 1.5 lakhs per year

Deposit Frequency – every year for 15 years

Deposit Modes – Via cash, cheque, DD, online funds transfer

Nomination – Allowed

Loan Facility – From Year 3 to year 6

Renewal – Allowed, for an extra 5 years at a time

Withdrawals – Every year from year 7. Also complete withdrawal of funds can be made only at maturity.

Benefits of investing in a PPF scheme

In PPF the deposit period is of 15 years and a lock – in period is of 7 years which means this scheme serves as a long term investment goal. Investing in PPF is an ideal option for building a retirement corpus as it serves as a long term investment, tax returns and capital protection. PPF is one of the most low risk investment schemes as it is backed by the government itself.

Public Provident Fund (PPF) is governed by the Public Provident Fund Scheme 1968 and it scrutinizes over the eligibility criteria, documentation requirement, opening, maintenance and operation of a PPF account including loan facilities, withdrawals, closure, and extension of accounts among other things.

Eligibility Criteria

Enrolling into PPF scheme is open to Indian Residents only who are of 18 years or above than that as there is no upper age limit to open an account in PPF. Also, HUF (Hindu Undivided Families) or NRIs (Non – Resident of India) or Foreigners are excluded from the scheme.

NSC (National Savings Certificate)

National Savings Certificate is an Indian Government savings bond which is meant for small savings and income tax savings investments in India. Under this scheme interested people can invest their money and will receive a certificate in turn, containing the particulars of their investments. This scheme is considered to be one of the safest investment options.  The money you invest in NSC is safe and you receive interest on your investment. Maturity period of NSC is 5 years. In order to invest in NSC, you can visit your nearest post office and enrol in it. This scheme also offers the facility to transfer your investment from one post office branch to another. It also provides nomination facility, after your death.

Features of National Savings Certificate (NSC)

This scheme has a variety of attractive features such as it can be purchased from any post office in India. If any subscriber wants to have a joint account, they can open a joint account as well. The minimum amount of investment in NSC is Rs. 100 and there is no limitation on maximum investment, i.e. any individual can investment any amount they like. However, income tax benefit will be available only up to Rs. 1.5 lakhs. The NSC certificate is available in the denomination such as Rs. 100, Rs. 500, Rs. 1000, Rs. 5000, and Rs. 10,000. Under this scheme the subscribers are allowed to avail loans as well.

Benefits of investing in a NSC Scheme

There are multiple benefits of purchasing National Savings Certificate (NSC) such as the interest can be tax free except for the interest that is earned in the last year. Investments made in an NSC come under 80 C of the IT ACT and afford the investor tax benefit. Also, NSC is a one time investment scheme where the minimum investment amount is Rs. 100 which is a very nominal, hence, it is within the reach of common man and anyone can buy this scheme.  NSC also works as a guarantee certificate and it also carries a lower rate of interest as compared to personal loans. In case you misplace your NSC certificate; you can get a duplicate one as well.

Sukanya Samridhi Yojana (SSY)

Sukanya Samridhi Yojana is a popular government schemes launched by the Prime Minister, Shri Narender Modi, which targeted at the parents of a girl child for their betterment. This scheme would encourage the parents to build a fund for the future education and other needs and expenses of their female child. This scheme has managed to reach a wider audience in the country as it is a great step towards providing financial security and financial independence to women.

Benefits of Sukanya Samridhi Yojana

According to the financial experts, availing this scheme would provide great benefits to the subscribers as it offers attractive rate of interest of 8.6% per annum which is more than that offered by most other schemes in the market. However, this rate if revised every year by the Finance Minister. An investment made under this scheme is also exempted from income tax under section 80 C of the Income Tax Act, 1961. Under Sukanya Samridhi Scheme, partial withdrawal is allowed on account of marriage or higher studies, once the girl child attains the age of 18 years of age. This scheme is meant for a girl child who is 10 years or old. And the account can be opened by the parents or guardian of the girl child and can be operated on her behalf until she reaches the age of 18 years. The scheme will mature after 21 years from the date of opening the account. The maximum amount that can be deposited in this account is Rs. 1, 50,000.

Senior Citizens Savings Scheme (SCSS)

In every society, senior citizens are always given the special place and consider them as the head of the family. In India, any people who have attained the age of sixty years or above are considered as senior citizens.

And in order to acknowledge their contributions and help them retiring gracefully, Government of India honours them by offering them wide range of attractive programs and facilities. The Senior Citizen Savings Scheme (SCSS) is one of them.

Senior citizen savings scheme boast of one of the best interest rates for any government sponsored investment product in India. As it is designed for the senior citizens, the procedure of applying for it kept extremely simple. To avail Senior citizen savings scheme fill up a simple application form at your local bank or post office and that’s the procedure. This scheme comes with all the security and assurance as it is backed by the Government of India. Under SCSS, a single applicant can open multiple SCCC account either individually or with joint investors. Also Senior Citizens Savings Account offers attractive returns i.e. 8.6% per annum. SCCC matures in 5 years but can be stretched for another 3 years, hence; it can be treated as a long term and both medium term investment schemes.

Features Public Provident Fund (PPF) NSC (National Savings Scheme) Sukanya Samridhi Senior Citizens
Interest Rates 7.8% 7.8% 8.3% 8.3%
Tenure 15 years 5 years 14 years 5 years
Risk factor Risk – free Risk – free Risk – free Re – investment risk
Account Opening Anyone Anyone Only guardian who have girl child Senior Citizens
Where to open Post Office / Bank Post Office Post office / bank branch Post office


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