Is “Sukanya Samriddhi” The Best Scheme For Your Daughter?

As part of the “Beti Bachao, Beti Padhao Yojana”, the Government of India launched the Sukanya Samriddhi Yojana or Sukanya Samriddhi Scheme. It aims to ensure financial security for the girl child. It is basically a scheme that allows a girl’s parents or legal guardians to save up for their daughter’s marriage or higher education, right from her childhood.

Understanding Sukanya Samriddhi Scheme and its benefits:

• This is a small savings scheme which can be opened in a post office or an authorized private or public bank.
• The account can be opened only under the name of a girl child, who needs to be up to 10 years of age.
• Only one account per child can be opened and each family can have up to two accounts, i.e., one for each girl child. An exception to this: a family can have three accounts in case of twin girls – as second birth or first birth itself results in three girl children.
• The account shall mature after 21 years from the date of account opening or at the time of the account holder’s marriage, whichever is earlier.
• With a minimum of just Rs. 250 you can open this account and thereafter any amount in multiples of Rs. 100 can be deposited. Every financial year, for 15 years, a deposit must be made. This deposit can range from a minimum of Rs. 250 to a maximum of Rs.1,50,000.
• After 15 years, you need not deposit any amount, but you will keep receiving interest
• To support the girl’s education, one withdrawal up to 50% of the balance is allowed when she reaches the age of 18 years

What’s better than Sukanya Samriddhi Scheme?

Sukanya Samriddhi Scheme is a good investment option to secure your daughter’s future, but probably not the best when compared to the benefits offered by company fixed deposits like Bajaj Finance Child FD.

Let’s look at some simple parameters that make Bajaj Finance Child FD better than Sukanya Samriddhi Scheme (SSY):

• Interest rate: In the first quarter of the financial year 2019-20 (April to June 2019), SSY was providing an interest rate of 8.5% which is pretty high. Whereas Bajaj Finance FD offers up to 8.60% interest rate and an additional 0.10% upon renewal of your FD.
• Fluctuations: The rate of interest given on SSY is subject to RBI’s decisions, but Bajaj Finance FD will offer constantly high interest without getting affected by the market, or other, fluctuations.
• Mode of investment: You can invest in Bajaj Finance FD online from the comfort of your home. To open a Sukanya Samriddhi account you need to physically go to the post office or an authorized bank.
• Lock-in period: SSY has a very long lock-in period, which is 21 years or till the time of the account holder’s marriage. Bajaj Finance FD lets you decide the investment tenor ranging from 1 to 5 years, with an option of premature withdrawal.
• Interest Payout: Unlike SSY, Bajaj Finance FD even allows you to withdraw the interest earned periodically. You can choose the frequency of interest payouts from monthly, quarterly, half-yearly and annually.
• Liquidity: If you want a premature withdrawal, you can withdraw only up to 50% from your SSY account and that too only after your daughter reaches the age of 18 years. Bajaj Finance FD lets you withdraw the whole amount or you can even avail of a loan against your FD.

Most importantly, you can avail Sukanya Samriddhi Scheme if and only if your daughter is up to 10 years old, but Bajaj Finance FD is available for you irrespective of her age. The highest stability ratings from CRISIL and ICRA also make Bajaj Finance FD the ideal option for investment.